Dangote Refinery and hike in fuel price
The sudden and unexpected hike in the price of fuel by the Nigerian National Petroleum Company Limited (NNPCL) is quite insensitive. In no small measure, it doused the euphoria that attended the coming on stream of the much-awaited Dangote Refinery. The new price regime, which took effect on September 3, 2024, was the second major increase within 15 months that President Bola Tinubu assumed office.
Like the second hike, the first one came suddenly. It was soon after President Bola Tinubu announced in his inaugural speech on May 29, 2023, that subsidy was gone. From about N185 a litre, the price jumped to about N600 a litre. In some parts of the country, the price was over N700 a litre. In the second increase, implemented by the NNPCL Retail Management, the price went up further to about N897 a litre in some NNPC filling stations. For many other stations, the price hovers between N1,000 and N1,200 as it varies from state to state.
The hike has not guaranteed the availability of the product. In many parts of the country, long queues of vehicles dot many filling stations. Sometimes, many motorists are unable to buy the product despite staying long hours at the filling stations. Black marketers are having a field day, selling as high as N2,000 a litre.
Various groups and individuals have lamented the situation. The Manufacturers Association of Nigeria (MAN) warned that the price hike could lead to higher inflation, massive loss of jobs and operational losses for the Small and Medium-Scale Enterprises (SMEs). The Yoruba socio-political group, Afenifere, Nigeria Labour Congress (NLC), the Trade Union Congress of Nigeria (TUC), the Lagos Chamber of Commerce and Industry (LCCI), the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), and the opposition Peoples Democratic Party (PDP), all condemned the price hike and called for reversal of the policy.
The NLC feels betrayed by the government. It said it accepted the N70,000 minimum wage the Federal Government offered recently because government assured it that there wouldn’t be any fuel price increase. The Presidency has denied giving this assurance.
The government has also denied increasing fuel price, which brings up the question, who is in charge? Why is the government engaging in doublespeak on the issue of fuel price hike? Even the reported removal of subsidy is shrouded in secrecy as there are suspicions that the government is still spending trillions of naira on it. The NNPCL recently declared trillions of naira profit. Suddenly, it claimed it owed suppliers to the tune of about $6billion. There is a limit to what people can take because what is clearly at play here is incompetence and lack of transparency.
Millions of poor Nigerians are the ones paying the price for this incompetence. The cost of transportation has gone up by over 50 per cent in many parts of Nigeria. Prices of goods and services have further gone up. Many people cannot afford the basic things of life. Food inflation is worse as some cannot feed themselves and their families. People are going through acute hardship. Simply put, the purchasing power of many citizens has seriously declined. Some are merely living corpses, dying without any rescue from any quarters.
The situation is unacceptable. Almost all the sectors in Nigeria revolve around fuel. Hence, we need predictable price for fuel. Government needs to come clean with the people. It cannot continue to subject people to serial hardship. We align with the NLC on the reversal of the fuel price hike. Nigerians do not deserve this harrowing and despicable treatment.
For 10 days last month, people trooped to the streets to protest hunger and bad governance. Part of their demands was the reversal of high fuel price. Another protest is planned for October. Will the new price hike not be an invitation to chaos?
Governance is about the security and welfare of the citizens. The insensitive price increase does not guarantee this welfare. Nigerians have suffered enough and it is time Tinubu waded in before things get out of control.
This is an opportune time for Dangote’s $20 billion, 650,000-capacity oil Refinery to come to the rescue of Nigerians. We are happy the refinery is on stream now and whatever had hampered its initial smooth take-off appears to have been tackled. The refinery has offered Nigerians a glimmer of hope as it will likely buy crude oil in naira, a situation that will ease off the burden of procuring dollars. The refinery will reportedly supply a total of 25 million litres of petrol daily to the Nigerian market in September.
The old refineries in Port Harcourt, Kaduna and Warri should either be revamped or sold off. This government should admit that it has made mistakes on fiscal and monetary policies. It should engage the labour unions and organized private sector with a view to giving further explanations on its actions.
