The Ding-Dong Of Fuel Price Increase


The ding-dong of a possible fuel price increase is on. Though the Federal Government has debunked news going around that it is planning to hike the price of petrol from its present N145 to N185 but the position that the current price was fixed when crude oil was selling at $49 is not sustainable today when it is selling at $67 made the government assurance of not the increasing the price doubtful.

In a statement issued yesterday by the Idang Alibi, the Director of Press of the Ministry of Petroleum to clarify the issue, he said: “The Ministry of Petroleum Resources would like to categorically state that the Honourable Minister never mentioned nor insinuated the need or plans by the Federal Government to increase the current pump price of Premium Motor Spirit (PMS)”

Alibi also reinstated the Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu’s submission to the to the joint committee of the National Assembly on Petroleum Downstream.

“The Committee has been in rounds of deliberations in the past few days and these discussions are still ongoing. The final decisions and recommendations from the Committee would be passed on to the President and Commander-In-Chief for approval”, said Alibi.

Alibi urged the public and indeed stakeholders in the Oil and Gas sector to disregard any such report of a price increase.

Kachikwu told the public hearing at the National Assembly on Thursday that the Nigerian National Petroleum Corporation, NNPC had incurred a cumulative loss of N85.5 billion in importing petrol and selling at the current retail price of N145 per litre, since October 2017.

Kachikwu said the price was fixed in the first quarter of 2016, when crude oil was selling for $49 and expressed fears that with the crude price rising to $67 a barrel, the pump price, may no longer be sustainable.

According to him, the landing cost of PMS which was N133.28 per litre in 2016, is now N171 per litre and this has resulted in the stoppage of importation of the product by independent marketers. This, he said had made the Nigeria National Petroleum Corporation ( NNPC ) to be the 100 per cent importer of the product.

From the statement of the minister, fuel price increase is just a step away. If truly the landing cost of fuel per litre is N171 according to NNPC, then it means the government is paying the subsidy of N26. Where is the much-touted deregulation of the downstream sector?

All the investment in our refineries over the years have failed to yield any positive result, the same stories are just being recycled to achieve the goal of a price increase. For as long as we continue to import, nothing will change and every Chrismas-New Year seasons we will have scarcity and this debate all over again.


About Author

Akin Akingbala is an international journalist based in Lagos, Nigeria. Aside being happily married, he has interests in music, sports and loves traveling.

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