Fuel Price Increases: NNPC’s impunity against Nigerians’ humanity
With twenty three fuel price increases, six reductions and one decisive price reversal, the Nigerian National Petroleum Corporation (NNPC) persistent upward review product price, often with reasons that lack credibility, always put pressure on the macro and micro economic breath of Nigeria. At the receiving end of each experience is the average Nigerian. Each fuel price increase digs a damaging hole in his purchasing power; with a punishing impact on his aspirations, existence and sense of worth.
Olamide George’s son slipped and hit his head on the bucket placed beside the bath tub; as he tried to pick his towel after having his bath.
He had a deep cut on the side of his head and it was bleeding profusely.
Promptly, his parents carried him into the car; all drenched in his blood.
When George started his car, he discovered the fuel in the tank could only take them to the nearest filling station close to the house.
Like a man possessed, he drove into the station at about 3pm.
To his horror, the usually busy filling station had ran out and on inquiry, he is told the outlet had not received any supply for the day due to the problem between Independent Marketers and the NNPC.
Frustrated, he called his friend who works in the hospital he was hoping to take his son.
His plan was that an Uber would be the only option left to take his boy, who had lost so much blood, to the hospital; which happens to be the closest by proximity to his location at the moment.
George’s friend told him there is pandemonium in the hospital with the families of the three different Patients they lost because the hospital electricity generators ran out of Fuel.
In the end, George lost his son.
Many Nigerians, in many unreported cases, experience this tragedy each time there is a pre-price increase fuel scarcity in the country.
The question is: must Nigerians be subjected to this fate each time?
Down and almost at their wit’s end and just when they thought it was over, the recently resumed NNPC-independent Marketers product price tango on another increase has finally confirmed the mindlessness with which their humanity is being assaulted with impunity by those they trusted with the management of the nation’s oil and its resources.
The first time fuel price would be ramped up was in 1973 when the price was increased from 6k to N8.45k; under the watch of the Gen. Yakubu Gowon’s military government.
From that time till date, fuel price has been increased over 23 times with Olusegun Obadanjo having the highest number of increases; as both Military and Civilian head of State.
Though, he cut the price from the N5 left for him by Ernest Shonekan to N3.25k; the Late Sani Abacha, would later increase it to N11 (a drop from his initial N15 he had taken the price to). But he used the differentials to create the famous Petroleum Trust Fund (PTF); through which the Late dictator touched the Lives of Nigerians in virtually all facets of life.
On the other hand, however, the myth behind fuel price increase was busted by the late Umaru Yar’Adua when he dared to revise fuel price from N75 to N65; and heavens did not fall.
Though both these two former heads of state have passed on, the question on the lips of Nigerians, today, will be: if NNPC, under their watch could achieve those feats, why can’t the same NNPC do the same thing, today?
Though behind closed doors, the men at the NNPC Towers manufacture the technical story and the narrative they like, to accomplish whatever agenda they desire, the buck stops on the table of the President, who now doubles as Petroleum Minister to consider the plight of helpless Nigerians to stop any attempt to further make their lives more miserable than it is.
Sadly, Mohammadu Buhari’s famous silence seems to have given the national oil company the license to leave Nigerians to the predatory claws of ‘market forces’ and now, the vultures of the nation’s downstream are about to have a free reign; on the Lives of poor and helpless Nigerians.
This particular round of the usual downstream rub-a-dub dance began with the NNPC spokesman, Kennie Obateru’s Press Release on February 28; in which he asked the public not to go into the usual panic concerning the availability of the product.
He assured, that the corporation had enough to last over one month; while putting them on notice of a possible fuel price increase, which he said would not be in March.
Cautioning against hoarding, panic buying, the Group General Manager
Group Public Affairs Division of the national oil company said, contrary to speculations of imminent increase in the price of Premium Motor Spirit (petrol) in the country, the Nigerian National Petroleum Corporation (NNPC) has ruled out any increment in the ex-depot price of petrol in March, 2021.
He swore this was true because NNPC was not contemplating any raise in the price of petrol, “In March in order not to jeopardize ongoing engagements with organized labour and other stakeholders on an acceptable framework that will not expose the ordinary Nigerian to any hardship.”
According to him, NNPC also cautioned petroleum products marketers not to engage in arbitrary price increase or hoarding of petrol in order not to create artificial scarcity and unnecessary hardship for Nigerians.
Assuring that it has enough stock of petrol to keep the nation well supplied for over 40 days, he urged motorists to avoid panic buying.
The corporation further called on relevant regulatory authorities to step up monitoring of the activities of marketers with a view to sanctioning those involved in products hoarding or arbitrary increase of pump price.
Not a few Nigerians would have winced at Obateru’s statement, because they have heard it so many times before.
Ironically, they have grown to adopt a paradoxical attitude to such statements at critical times such as today’s.
In other words, when NNPC tells them not to panic-buy, they actually panic and rush to the nearest filling station or seek available black market sellers of the product.
Unfortunately, for George, he didn’t have the opportunity of seeing those young boys selling petrol in Jerry cans as they had been driven away from the fuel station; by security agencies. Perhaps, he would not have lost his only child.
Sequel to Obateru’s media statement, fuel queues returned in Abuja and Lagos.
Our investigation showed that many filling stations were not selling petroleum products in Abuja and environs at the weekend, blaming rising depot price and lack of access to petrol due to new payment rules by the Petroleum Products Marketing Company (PPMC) a subsidiary of the NNPC, for the development.
As a matter of fact, pockets of queues were also observed in a few filling stations in Lagos; while some of the marketers in Lagos had shut down their filling stations.
Those that remained open increased the pump price of petrol at their filling stations to avoid shutting down operations.
Our findings revealed that some of the marketers, who were selling at N162 per litre, had raised their petrol prices to between N165 and N170 per litre, in defiance of the directive by the NNPC that there would be no increase in petrol price in February.
Some even employed deceptive tactics as they sold above the N162 per litre displayed on their bill boards.
The closure of retail stations and some major marketers’ retail outlets, aside from the NNPC, led to queues at the few petrol stations in Abuja; as some of the retail stations secretly sold the product to loyal customers.
Although, in validation of Obateru’s statement, within the metropolis, NNPC stations maintained the old price as its retail outlets sold for N162 per litre.
However, the story was different with Independent Marketers as some of their retailers which managed to get the product, sold petrol between N163 and N170.
From the explanation by some of the non-NNPC players in the business, non availability of the product is the cause of the current sad situation in the downstream side of the nation’s oil and gas industry.
National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Dr. Billy Gillis-Harry, blamed the rising depot price and lack of access to the product as the cause of the scarcity.
About three weeks ago, Gillis- Harry had raised the alarm regarding the imminent fuel scarcity; when it became almost impossible to get the product at the going depot rate.
According to him, depot owners hiked the product price, making it impossible for filling station owners to sell at N162 or N163.
But how come A.A Rano sold at N163 per liter? How did the Owner get access to the Product and many of his fellow Independents didn’t?
“We already saw this coming three Fridays ago. To make matters worse, PPMC has changed their payment style which is very inefficient. That’s why you are seeing what you are seeing. And the government will tell you they have supply. But where is the supply?
“The retailers cannot have access, marketers cannot have access. The only people they are giving products are the depots and what’s the depot doing, their prices are excruciating on our accounts. It’s simple, retailers cannot restock.
“It’s really a shame because this is something that was foreseeable and we could have resolved it. Labour is not the right association to discuss petroleum products issues with. They have no knowledge of the dynamics of the grassroots of this business,” Gillis-Harry lamented.
Although, the government is still selling products at N148.69 at the government depots, the retailers appears to have been denied access to buy as they are forced to go through an inefficient system of qualifying to pay for it online.
Based on this unfortunate scenario, retail outlets continue to depend on private depots to source product.
Indeed, as the national President of PETROAN stressed, after sourcing at an exorbitant rate, it would not make business sense to sell at N163.
“It’s only the few filling stations that are accessing the product from depots that are getting it. And they are not many. Out of every 10, just two have access. If they go to the depot with N5 million to N7 million and it’s now over N8 million where will the rest come from?” he said.
When a top player as Gillis-Harry suggests that the importation of petroleum products should be open and liberalized to associations like PETROAN to be able to import petroleum products; then one naturally asks who are those importing? Or, is NNPC still the sole importer?
“We have said let’s have a business meeting with PETROAN which represents over 100,000 filling stations. They can’t continue to play politics with the lives of Nigerians,” he posited.
Gillis-Harry’s position reveals the underlying impact of NNPC’s flip-flops on fuel availability and affordability and the impact on the torturing cost of living; on Nigerians.
Meanwhile, IPMAN also advised Nigerians to stop panic buying and stocking petrol.
In March last year, the federal government said it had begun the execution of a deregulation policy which would ensure that petrol prices are determined by market forces, one of which is the international price of crude oil which has recently climbed to $66 per barrel.
While decrying the long queues across some States, the National Public Relations Officer of IPMAN, Alhaji Suleiman Yakubu, said the rise in crude oil price is the reason for the imminent products price hike.
But he assured Nigerians that normal supply of petroleum products would soon be restored since loading has commenced at various depots.
“We want to assure the buyers that government and marketers are doing everything possible to ensure that the products are available in every filling station within a few days starting from today,” he said.
Yakubu’s statement is a direct contrast Gillis-Harry’s frustration. While the PETROAN President is angry that most of his members were denied access to the Product; Yakubu, on the other hand, is implying that the Marketers actually downed tools in protest over unfavorable pricing of the product.
Yakubu’s allusion to the rising cost of crude oil as the reason for the imminent price increase also throws up some concerns.
First, the price of Crude Oil is still hovering around $50-60 per barrel space. At $70 and above, Nigerians have bought fuel at far less than N145 per liter.
Yes, you will say those were the days of fuel subsidy. But the so called subsidy has been proved to have been rid off, only, in the minds of the players.
Two years down the line, subsidy on Petroleum Products is still in place. Otherwise, why would NNPC continue to hold on to price control.
One year after, the deregulation policy on the downstream is still hazy if Gillis-Harry can complain that his members are not allowed to import the product.
This is why many believe when government says it is deregulating the downstream, they know government is talking about price increase and not providing a level-playing field for Players in the business
On diesel, the PPMC MD Musa Lawan explained that diesel price was not touched as it has already being deregulated and determined by market forces.
It may be alright to deregulate diesel since it is an optional Petro Product; although the terms of deregulation is not known.
The question is, what is deregulated about diesel? Is it the price that is deregulated? As far as many know, the fate of diesel has been left to some imaginary and unstructured market forces that is essentially founded on price increases.
Or, are Independent Marketers allowed to import the product too?
If the latter is the case, for diesel, why can’t the same logistics bring in PMS and others? Or, will the ships reject Petrol or Kerosene products just to take only diesel? Or, will the seaways revolt against ships bringing in petrol while it calms down for diesel vessels to pass?
These are the questions NNPC would need to answer to enlighten hydrocarbon novices or non-initiates about the logistics of importing Petroleum Products into the country.
Whatever price, NNPC and the Marketers arrive at, it would be the second major landmark price shift in the Buhari administration.
The brief reduction that was effected during the Covid 19 lockdown period when the price of Crude Oil fell to its lowest, cannot truly be taken seriously.
Many felt that the price reductions were not commensurate to the price of Crude Oil that came down to as low as below $30.
Secondly, some conspiracy theorists believe NNPC did that deliberately; to prepare Nigerians for the removal of fuel subsidy and the malady that comes with it.
While still dithering on deregulation, the NNPC reduced fuel price to N108 per litre from N113.28k; representing a 4.8% drop in prices.
That would be the second time in about two months that the NNPC had drop the price of petrol. On March 19th, 2020, the NNPC announced a reduction from N133.28/litre to N113.28/litre.
Quoting the Managing Director of the Petroleum Products Marketing Company (PPMC), Musa Lawan, Obateru stated that, “The new ex-depot price of Premium Motor Spirit (PMS), otherwise called petrol, reflects the company’s market strategy to make more sales while complying with the Petroleum Products Pricing Regulatory Agency’s (PPPRA) price template.”
Explaining the mechanism with which they arrived at the price, the NNPC spokesman said, “After an extensive review of market realities by the PPMC internal price review unit.”
PPMC internal price review unit!!! What happened to the PPPRA pricing template?
The NNPC GMD Mallam Mele Kyari had alluded to the possible removal of fuel subsidy back in April 2020; raising optimism that Nigeria was going to ditch a long-standing government policy of spending trillions of naira subsidizing petrol.
By that announcement, NNPC implied that the government would still manage the price of petrol rather than allow the market to determine the price just as it is for AGO otherwise called diesel.
This was what the corporation said last year.
Barely 12 months later, it is now, suddenly, alright to allow market forces to determine the pricing template.
The conflicting statements from the government agencies regulating downstream, the back and forth between NNPC and the Marketers among other organized private sector players show that so many things do not add up in the business.
The fact that NNPC and the supervising ministry offer excuses that do not comply with normal scientific logic to explain arbitrary price increases is a further reminder that the negative impact of every hike in fuel on the Lives of Nigerians means nothing to them.
In other words, since there is nothing Nigerians can do about the impunity on their humanity, NNPC believes it can impose any price increase on them; whether they like it or not. Whether it destroys their Lives or not.