Pump Price: N10 Differential, A Political Gimmick, Say FCT Residents

‘Why Nigerians Will Not Feel Effect Of Reduction’

THE federal government announced that a reduction in the pump price of petrol would take effect midnight January 18, 2015; a shift from N97 to N87 per litre, while the new ex-depot price for petrol would be N77.66 kobo. The development stemmed from the reality of global reduction in the price of the product, which nosedived significantly in the last few months.

   Expectedly, when the news broke, many Nigerians read political interpretations to the action of the government, especially when the general election is just few weeks away. 

   One such citizen is Johnson Adekeye, a sociologist, who posited that the reduction is long overdue. He said advanced countries of the world had already done the right thing by reducing their pump price of the product, as dictated by events in the global market. Adekeye said the federal government is aware that the opposition might use none reduction in pump price to campaign against it. 

   He said: “This is a country where the government blackmails the citizens at the slightest opportunity. I call it blackmail because government wants people to see its statutory responsibilities to them as a favour. So, they want the people to be appreciative. And this trend is not only wrong but it is also dangerous. Nigerians have rights and those rights should not be seen as government doing them any favour. 

   “We have been monitoring the trend in other advanced counties since oil prices began to drop. The United States, for instance, has achieved a 50 per cent reduction, while the UK has achieved 30 per cent. But we are seeing 10 per cent here. Although, other factors like tax is a determinant, but the important thing is that those countries allowed market forces to determine the price, unlike in Nigeria where government fixed the price. We can’t continue this way. That I am very sure.”

   While Adekeye called for market forces, like demand, supply and business competition, to be allowed to determine price, Lekan Akinsola said such prescription might be impossible in Nigeria. He argued that market forces could only be given voice in countries with functional refineries.

   He said: “Allowing market forces might not be in the interest of Nigerians. The reason is simple; we don’t have functional refineries. Market forces cannot determine prices of petroleum products in Nigeria until we have refineries that are operating in full capacity. The state of Texas alone has some 27 functional refineries while the whole of Nigeria cannot even boost of four that are operating in full capacity. We all know that corruption is the major problem of this country. How often have we heard about Turn Around Maintenance of those refineries? Granted, government might want to tell us that a refinery is not something you buy off the shelf, but the country would have achieved remarkable achievement in this sector had steps been taken earlier to build refineries and block all the loopholes people use to siphon money in the sector. 

   “In any case, why are we talking so much about petrol? How about kerosene used by real Nigerians? The price of cooking with it is even more than cooking with gas, which the big guys use, while the poorest of the poor use kerosene. Why are we not concerned about that too?  Anytime there is an issue with the pump price of petrol, the labour movements go about threatening strike actions and all that, while the real people that do not use petrol at all are left to pay through their noses in order to cook. Is kerosene not a by-product of crude oil? 

   “My mother in the village does not need petrol for anything whatsoever. She does not own a car, she can’t pour petrol in her lantern, and neither does she own a power generating set. All she requires is cooking, and the product she needs most is not within her reach, and no one is concerned about this. We are only interested when petrol is mentioned. This should not be.  Government should be interested in the poor and not in themselves. In fact, in sane societies, the rich are made to pay for the welfare of the poor by way of taxation. But how many of them pay tax here? They don’t pay tax on all their edifices littering everywhere, most of which are empty. They fill their gigantic vehicles with petrol, almost at no cost, and above all, the much talked about oil subsidy still finds its way into their pockets. This is corruption. 

     While many filing stations in the FCT are yet to comply with the new pump price some others have. The excuse given by those who are yet to comply include the need to sell their old stock. Some said they were waiting for persons who, according to them, would come and change their metres on the dispensing machines.  

   Residents, however, faulted this claim.  Jubreel Momoh wondered why pumps are quickly adjusted whenever there is an increase in pump price but now that there is a reduction, filling stations are taking a long time to comply.

   “There is problem in this country. If it were increase in pump price, all of them would have adjusted their pumps overnight. But now that they have to reduce prices, it is one story after the other. All these can happen because Nigeria is a lawless society where everybody does what he or she wants. In any case, who are the owners of these filling stations? The big people, of course! They are aware that no one can close down their stations or sanction them if they don’t comply. 

   “I will advise that no one patronises those who refuse to comply. People should be patient, go round, and identify those who have complied and buy from them. This way, those who refuse to adjust their pumps would be left with no choice but comply.  The only problem here is that Nigerians are too impatient. And again, most people see the N10 difference as no big deal. But if one calculates N10 in let’s say 20 places, that is N200! That can buy you a recharge card. If people can think about it this way, then those marketers who refuse to comply will end up drinking their fuel.”

   Gbenga Adebayo said he could not really blame the marketers. According to him, the desire of every business owner is to make profit.

   He said: “The excuse most of the attendants at filling stations are giving is that they are waiting for directive from their company headquarters before they can change the pump price. I would not blame them because the main aim of every business is profit. But I think if people refuse to buy from this group, they would not have a choice but comply with what the federal government has directed. The difference in the pump price is not much anyway. We expected it to be much lower. The price in the global market has fallen far below what Nigerians are being offered. We want a better deal.”

   For commercial vehicle operators, services remain the same in and around the FCT; there is no reduction in fares. A cross section of them said the reduction is too minimal to have any positive effect on charges, adding that there has never been a time in Nigeria when government increased pump price by a N10 margin. They also noted that scarcity of the lower denominations of the naira would not give room for any reduction in fares.

   A driver who plies Berger roundabout to Kubwa explained: “The reduction does not make sense. We charge N100 on this route. If we want to reduce the price, now, what price should it be? We can’t reduce it to N50; that will not be in our own interest. And if we say, ‘Okay, let’s reduce it to N90, where do we begin to look for N10 change for someone who may pay with a N100 note. At the end of the day, the customer might just forgo the change instead of wasting his time waiting for the driver to look for the N10 change for him.

   “Nigerians will not feel the effect of this reduction. I think government did it just for election campaigns. They know that if they don’t reduce the price, like other countries have, people will react, and they might lose the election. If they want to do the right thing, let them reduce it to N50 per litre. Only then would we start talking of reduction in fares.”

Rivers Residents: Realistic Pump Price Should Be N40 Or N50

From Ann Godwin, Port Harcourt

THE N10 reduction in pump price of petrol by the federal government may have been expected to attract commendation. Some Nigerians, however, have argued that given the current fall in crude oil price in the global market, the price of petrol in the country should be N40 or N50.

   They also argued that subsidy removal is wrong and fraudulent, adding that the issue of subsidy should not have risen at all, had the country’s local oil producing capacity been efficient.  

   An economist, Victor Mbonu, said it is double fraud for the federal government not to allow Nigerians to enjoy the benefit of fallen crude prices in the global market by not selling Premium Motor Spirit (PMS) at N50 per litre. 

   He said: “Tell me any country in the world that exports crude and imports finished products. It is our inefficiency that led us to be importing oil, a thing that we produce. At N87, the price is still high. The government, when it increased petrol price from N65 to N150, argued that oil price was increasing globally before several protests forced a reversal to N97. Now that oil price is falling, what happens? Why can’t government allow Nigerians to benefit from the fallen crude price in the global market?” 

  In her reaction, Vice President of the Manufacturers Association of Nigeria (MAN), Mrs. Emelia Akpan, commended the effort of the federal government on the N10 reduction. She, however, said: “We expect more reduction, at least 30 per cent, because generally, this is going to affect the manufacturers. Bank rates will go up. By and large, it is going to be very tough for manufacturers. If government had diversified into non-oil sectors, we would not have arrived at this point. This stresses the need to drastically invest in non-oil sectors.”

   Meanwhile, visits to various filling stations across the state showed very low compliance rate with the directive.

   Virtually, all the independent petrol stations visited were still selling at the old price of N97 per litre, claiming that the products were old stocks. Some major marketers like Total, NNPC and Oando were selling at the new rate of N87 per litre. It was also observed that some major marketers who were yet to load products at the new rate locked up their stations. The Guardian observed skeletal patronage at the stations that were still dispensing at N97 per litre.

   When some consumers were asked why they still patronized stations that were selling the product at N97, their answers were similar: “My fuel tank was in the red. I do not have the time to search for stations selling at the new rate.”

   Grieved by the development, a social commentator, Chika Nwosu, said: “Marketers who claim they have old stocks are lying. What if the directive was a 20 per cent increase? The same marketers who are complaining would implement it in the next minute, in order to exploit the masses. Let Nigerians come out and fight this!”

   He blamed the Department of Petroleum Resources (DPR) for alleged failure to monitor compliance rate across the state.

  Justifying reason for selling at N97 per litre, the Manager of Owo Oil, Emma Davison, said: “The directive came when I had old stock with me, and the old stock is just about 2,000 litres. Once we dispense the litres, we will begin to comply with the directive.” 

   The Manager of Parflox Oil, along Eliozu road, said the directive is a welcome one, as it would help reduce extra expenses by marketers in the cause of getting products. He disclosed that he had 350,000 litres when the directive was given, adding: “I feel the federal government was hasty in giving a one-night deadline for commencement. Government should have given us at least three days to comply, considering that some of us have old stock.

   Speaking on the matter, the Chairman of Independent Marketers of Nigeria (IPMAN), Rivers State chapter, Sunny Nkpe, said the union has directed its members to comply with the directive but requested further reduction by the federal government, given the continual fall of crude oil prices in the global market. 

   He gave assurance that all the members would comply before weekend, warning that putting intense pressure on them might make them to cut corners.

…Fares Shoot Up In Kogi

From John Akubo, Lokoja

DESPITE recent reduction in the price of Premium Motor Spirit, many motorists in Lokoja believe the effort by government amounts to eye service in order to score points in February’s election.

   According to Obatemi Nuhu, a taxi driver plying the Okene-Lokoja road, fuel price should fall below N65. He noted that most of the independent marketers have refused to comply with the new price regime in Kogi State; hence they continue to sell at the old price of N97.

    For commuters, the reduction in price has not resulted in any relief in fares, as cost of transportation seems to have increased. The fare from Lokoja to Abaji, which used to be N500 has gone up to N600; Lokoja to Anyigba which used to be N600 is now N700, a situation, which has made commuters raise alarm.

   The Guardian found that most of the petrol stations within Lokoja metropolis have not changed to the new price approved by the Ministry of Petroleum Resources. Some of the NNPC mega stations in the state capital have complied, though some commuters expressed worry that metres may have been doctored. Total and Mobil filling stations were among few independent marketers that seemed to be complying.   As at the time of filling this report (Friday) Forte Oil, Oando, and Total filling stations were not dispensing the products.