Thursday 31 December 2015

Mixed reactions trail fuel price reduction

The Peoples Democratic Party (PDP) has said that there was nothing to cheer in the new pump prices of petrol announced by the federal government who it has asked to explain its claims of subsidy removal.

The party said the new prices announced were a continuation of the All Progressives Congress (APC) government by deception.

The PDP, in a statement by its National Publicity Secretary, Olisa Metuh in Abuja on Wednesday said beside its deceptive element, the reduction in the N87 per litre pump price to N86 and N86.50 per litre for the retail outlets of the NNPC and retail outlets of private business concerns respectively offered too little to cheer.

The opposition party recalled statements made by APC leaders in favour of crashing petrol pump prices when they were in opposition.
The statement added: “After heightened expectations occasioned by the promise to review the N87 per litre pump price of petrol made by the administration amid crippling scarcity of the product during the Christmas season, the announcement of this tokenism has come as a disappointing anti-climax, considering that only in January this year, the PDP Federal Government reduced the pump price from N97 to N87 per litre.

“That was done in the wake of the fall in the price of crude oil to between $42.65 and $50 per barrel. The PDP government then, in reaction to the development in the global oil market, revised its pricing template that brought down the pump price by N2.84 more than the N87 fixed as the pump price of petrol. The implication was that the Federal Government was still subsidising the N87 price by N2.84 per every litre of the product.

“The APC-controlled Federal Government, consequent upon stepping in the saddle on May 29, this year considered the market and decided through a supplementary appropriation to pay N413 billion as subsidy to petroleum marketers. In announcing the new pump prices, the APC Federal Government claimed that the subsidy element has been removed. The question is; how much were we paying for subsidy when the pump price was N87? Has this marginal reduction now knocked off completely the huge subsidy paid at N87 per litre or should it not have only further reduced the size of the subsidy?

“The APC government therefore must explain what it is trying to hide. The government could not have earmarked and/or paid a whopping N413billion in subsidy through its 2015 supplementary appropriation when petrol was selling at N87 per litre and now tells us that at N86 or N86.50 per litre, no subsidy will be paid. Is it trying to make the previous government look dubious or what?”
In another development, the Nigeria Labour Congress (NLC), on Wednesday, disagreed with the process leading to the reduction in the price of fuel from N87 to N86.50, saying it is unacceptable.

Though, the congress said it was not against or oppose the price reduction but emphasised that the process of the reduction violates the law and signal dangers ahead if accepted.

The General Secretary of NLC, Comrade Peters Ozo-Eson, who spoke with the Nigerian Tribune, doubted the sincerity of the government and questioned how the government came up with its template to come up with the new price of N86.50; when the board of the Petroleum Products Prices Regulatory Agency (PPPRA), which is constitutionally empowered to do this, has not met for two years.

He warned that the Minister of State for Petroleum, Ibe Kachukwu, or the government cannot arrogate the constitutional power of the PPPRA board to itself, saying that the board of the agency include other stakeholders such as the markerters, Nigeria Labour Congress, labour unions in the oil industry, Ministry of Finance, Ministry of Petroleum and other stakeholders.

Ozo-Eson regretted that the government has totally ignored and disobeyed the law and not subjected itself to the rule of law on the price reduction.
He said: “There is a law that stipulates how these things are done. In a democracy, government must act in accordance with the law. As of today, the board of PPPRA has not met in over two years and so the PPPRA cannot therefore be coming out with the templates and recommendations because the logic of the law that set it up was that it is a point where the major stakeholders can collectively look at the facts. The law recognized those stakeholders as members of the agency, including the marketers themselves, including labour, labour unions in the oil sector, government, Ministry of Finance, Ministry of Petroleum and so on.”
Also, following the announcement of reduction in pump price of premium motor spirit (PMS) otherwise called petrol effective January 1, 2015, marketers and other stakeholders have commended the Federal Government but urged on full deregulation of the downstream sector to pave way for needed investment in the sector.

While reacting to the pump price reduction, the National Operation Controller, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Mike Osatuyi, called on the Federal Government to enforce full deregulation of the downstream.
According to him, “the pricing template is very marginal, it is still not bad provided that the product allocation is available. We hope that the Nigerian National Petroleum Corporation (NNPC) would not ration product distribution to marketers because they have not open up the market.

“Now that the government is holding on to the larger percentage of petroleum product importation, let’s see what happens.”
On his part, the Chairman, IPMAN Western zone, Alhaji Ahmed Dabo, said that the pump price reduction was a welcome development.
According to him, “the government still has large control over the depot, while marketers would adjust to whatever price they instituted. We at IPMAN believed that total deregulation remains the best option in addressing the downstream sector. What we are interested in is availability of the product. The government should ensure adequate importation of products across the country.”
The Managing Director, Integrated Oil and Gas Ltd., Captain Emmanuel Iheanacho, said that deregulation remains a great solution to lot of problems and not just a solution to energy distribution problems.

He argued that deregulation is also a solution to the economic problems confronting the nation, adding that a lot of resources are tight up in the subsidy and the subsidy benefits are not directly benefitting the poor people.

Meanwhile, motorists in the Federal Capital Territory (FCT) have expressed mixed opinions over the Federal Government’s reduction of petrol pump price from N87 to N86 per litre at NNPC stations from Jan. 1, 2016.

A cross section of the motorists, at different petrol stations in Abuja on Wednesday, told the News Agency of Nigeria (NAN) that they were positive that it would ease the suffering of Nigerians.

Some others, however, said it would not make any difference.

Mr James Akande said that the decision was "a welcome development as long as it would create availability of the product for Nigerians’’.

Akande said though the action might not bring an immediate change in fuel availability in the country, Nigerian’s should focus on the long term results.
"As long as the measure will lead to availability of the product in the market then it is a very welcome idea,’’ he said.
Another motorist, Mr Jonathan Momoh, said that considering the current economic situation, even when the difference was not much, it was still appreciable.
"Directly or indirectly, most things depend on the cost of fuel because you need transportation to move around to provide goods or services; so it should affect the cost of products positively,’’ he said.
He said if the policy was properly implemented and everyone in the business was carried along, the problem of scarcity of the product would not occur anymore.

Credit: Nigerian Tribune

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