Presidency denies any plans to reintroduce fuel subsidy
…says there’ll be no more increase in petrol price
The presidency, on Tuesday, said that the administration of President Bola Tinubu has no plans to reintroduce any form of fuel subsidy or reverse the deregulation policy.
The clarification follows insinuations in some sections of the media that the Federal Government may temporarily be reintroducing fuel subsidy in the face of the increase in the landing cost of the product and skyrocketing price due to the free fall of the naira in the parallel market.
This disclosure is contained in a tweet by the Senior Special Assistant to the President on Media and Publicity, Tope Ajayi, on his official Twitter account on Tuesday, where he stated that there was no condition to support fuel price increase at this time.
Ajayi said, “There is no plan to reintroduce any form of fuel subsidy. There is no condition to support any increase in prices at this time. President Tinubu is convinced based on information before him that we can maintain current pricing without reversing the current deregulation policy by swiftly cleaning up existing inefficiencies within the midstream and downstream Petroleum sector.”
This is also coming less than 24 hours after the Nigerian National Petroleum Company (NNPC) Limited said that it is not planning to increase fuel pump prices at its retail stations.
The oil firm in its statement on its Twitter account said, “Dear esteemed customers, we at NNPC Retail value your patronage, and we do not have the intention to increase our PMS pump prices as widely speculated. Please buy the best quality products at the most affordable prices at our NNPC Retail Stations nationwide.”
Also, a few hours ago, President Tinubu’s Special Adviser on Media and Publicity, Ajuri Ngelale, noted that the market has been deregulated and will remain so.
Ngelale, while briefing journalists after he had a closed-door meeting with the president on Tuesday, emphasized that government will address the inefficiencies within the midstream and downstream petroleum subsectors to maintain prices where they are without having to resort to a reversal of the administration’s policy in the petroleum industry.
The presidential aide also noted that the daily consumption of fuel had dropped from 67 million litres to 46 million litres following the removal of the subsidy.
What you should know
Recall that yesterday, there were reports that the oil marketers had hinted at plans to increase the pump price of petrol from the present rate to between N680 per litre and N720 per litre in the coming weeks should the dollar continue to trade between N910 and N950 per litre at the parallel market.
The Nigeria Labour Congress (NLC) thereafter threatened to proceed on a total, comprehensive and indefinite nationwide shutdown of the country if there is another increase in the pump price of petrol from the existing N617 per litre, which it described as illegal.
The presidential spokesperson says Nigerians pay the least amount for petrol in West Africa.
He said: “The president wishes to assure Nigerians, following the announcements by the Nigerian National Petroleum Company Limited (NNPC), just yesterday that there will be no increase in the pump price of petroleum motor spirit anywhere in the country.
President Tinubu, through his spokesman, also acknowledged that there are inefficiencies within the downstream sector that are contributing to the fuel price controversy. He assured that all loopholes associated with the smooth delivery of petroleum products in the country will be addressed without delay.
“The president also wishes to affirm that there are presently inefficiencies within the midstream and downstream petroleum sub-sectors that once very swiftly addressed and cleaned up will ensure that we can maintain prices where they are without having to resort to a reversal of this administration’s deregulation policy in the petroleum industry,” Mr Ngelale said.
Since 29 May when Mr Tinubu was inaugurated as president during which he announced the removal of subsidy on petrol, the pump price has tripled: from about N200 to about N600. This has led to increases in the prices of goods and services and has worsened the economic situation of millions of Nigerians.
Palliatives announced by the president to cushion the impact of the fuel subsidy removal have either not been implemented or their effects are yet to be felt by Nigerians.
With Nigeria importing almost 100 per cent of its local petrol needs amidst the rising exchange rate of the naira to the dollar, many Nigerians estimate that the petrol price will further rise since it has been deregulated and there is no subsidy.
However, the state oil firm NNPCL said it has no plans to increase the price of petrol, a statement now affirmed by the president.
Labour unions have vowed to embark on an immediate strike if the price of petrol is further increased.
Speaking on the threat by the labour unions, Mr Ngelale said the government sees no need for the threat.
“The president wishes to state that it is incumbent upon all stakeholders in the country to hold their peace. We have heard very recently from the organized labour movement in the country with respect to their most recent threat.
“We believe that the threat was premature and that there is a need on all sides to ensure that fact-finding and diligence is done on what the current state of the downstream and midstream petroleum industry is before any threats or conclusions are arrived at or issued,” he added.
He emphasized that contrary to some reports, there are no plans to reintroduce subsidies on petroleum products.
“The market has been deregulated. It has been liberalized and we are moving forward in that direction without looking back,” he said.
Nigeria’s petrol price relatively cheap
Mr Ngelale also announced that data supplied by NNPCL to President Tinubu shows that Nigerians pay the least price for petrol per litre compared to other West African countries.
“I wish at this juncture to also provide a set of graphics which the president has authorized me to share with Nigerians that otherwise would be confidential. These are graphics supplied to Mr President by the NNPCL.
“In the graphics, what you will find is the present cost of refined petroleum motor spirit at the pump in each of the West African nations that neighbour us and I’ll just name some for example, even as I know, you will be showing your audiences the graphics, which the president has graciously approved for public release today.
“Senegal’s pump price today is N1,273 equivalent per litre, Guinea at N1,075 per litre, Côte d’Ivoire at N1,048 per litre equivalent in their currency, Mali N1,113 per litre, Central African Republic N1,414 per litre, Nigeria is presently averaging between N568 and N630 per litre.
“We are presently the cheapest, most affordable purchasing state in the West African sub-region by some distance. There is no country that is below N700 per litre. So this is the backdrop we have seen that at the inception of our deregulation policy as of June 1, as Mr President took office, we saw PMS consumption in the country drop immediately from 67 million litres per day consumption, down to 46 million litres per day consumption. The impact is evident,” he said.
He appealed to Nigerians to understand the need for the economic policies despite the impact on citizens.
“What it also does mean though, is that we are not at the end of the tunnel. There is still a bit of darkness to travel through to get toward the light. And we are pleading with Nigerians to please be patient with us.
“And as we promised from the beginning we will be open with Nigerians, we will be transparent with them. And we are ready to show you exactly what it is that our nation is facing with respect to the illiquidity in the market in terms of foreign exchange, as a result of what is now known to have been gross mismanagement of the Central Bank of Nigeria over the course of several years preceding this time,” Mr Ngelale concluded.
