Contrary to electioneering promises that this administration will reduce fuel price from N145 to N40, if voted into power in 2015, the persistent scarcity since last year due to rise in oil price has forced the government to begin a review that will end up in increasing pump price after all.
Since the resurfacing of scarcity in 2017, government had been assuring Nigerians that increasing pump price is never in the basket of choice even as the scarcity bites harder.
The first hint to raising the price emerged penultimate Monday when the Minister of Finance, Mrs. Kemi Adeosun explained that rise in crude oil price means two way scenario for the country; one, higher income from sales; and secondly and most disheartening, shocks in fuel local pump price.
It was not clear if the directive given to the NNPC to clear petrol queues before the end of yesterday (Sunday), by the Minister of State for Petroleum, Dr. Ibe Kachukwu, was in line with the apparent open secret of jerking up pump price either before or after the 2018 Nigeria International Petroleum Summit.
Before now, major marketers’ have deserted fuel importation business due to forex crisis and higher landing cost caused by rising crude oil prices.
This development caused the Nigeria National Petroleum Corporation (NNPC) to become the sole importer, which by all ramifications cannot import alone, enough fuel to saturate the entire country.
In consideration of the observed failures and all tested defeatist strategies by the current government to continue to maintain the N145 pump price which it increased, indication emerged after last week’s National Economic Council (NEC) that the government has failed in its promises amongst others to fix the refineries’ in record time after winning the election as up till now, the moribund refineries has no clear future in terms of resuscitation.
A follow up to accepting the failures came at the last NEC meeting presided over by Vice President Yemi Osinbajo at the Presidential Villa, Abuja, when it was agreed to set up a committee headed by the Gombe State governor, Ibrahim Dakwambo to interface with NNPC with a view to determining a higher pump price that end scarcity by encouraging major marketers back into the business of importation.
The decision stemmed from the testimonies of the Group Managing Director of NNPC, Maikanti Baru who briefed the council on the reason why the fuel scarcity still persists.
He said, “The second issue that was discussed was the issue of the scarcity of petroleum product. The problem was addressed by the Group Managing Director of the NNPC.
“The issue is of course caused by an inter-play of the exchange rate of the naira and the dollar and the price of crude oil at the international market which, affects the landing cost of refined products in Nigeria and in the process makes the operation of the current price regime almost impossible.
“As at today, most if not all independent marketers have stopped importing refined products into Nigeria. It is only the NNPC that has been doing it, and the NNPC has been suffering a lot of setbacks and the highest amount of under-recovery.
“By under-recovery it means the interplay between the landing cost of a litre of the PMS in Nigeria and the pump price of that product. If the product lands at N170 for example and you sell at N145, immediately you know that you have an under-recovery of about N25 for each litre of fuel.
“The National Economic Council has a committee that has been interfacing with all revenue generating agencies of the federal government under the chairmanship of the Governor of Gombe State.
“That committee has been charged with the responsibility of interfacing with NNPC with a view to determining the correct price for PMS considering the price of the product in especially countries that are bordering Nigeria. Because that is one of the reasons that encourage smuggling of the products to these areas,” NNPC boss averred.
Political observers say the failure of the current administration in handling the fuel crisis will go a long way in driving decisions of electorates come 2019 elections, less than one from now.
