Fuel Pump Price Reduction, Politically Motivated? ……………Level Of Compliance Zero

By Yemisi Izuora/Ijeoma Agudosi

Jonathan

Federal government on Sunday announced a cut in petrol prices, a month before the country votes in presidential and parliamentary elections, prompting question on the motive for the action

Petroleum minister Diezani Alison-Madueke told an evening press conference that the price of a litre of petrol would drop from 97 naira to 87 naira (47 US cents) at midnight on Sunday.

The measure was taken with the approval and directive of President Goodluck Jonathan, a candidate in the February 14 polls, she said, taking into account the recent volatility in the oil market.

Nigeria depends on crude exports for 70 percent of government revenue and some 90 percent of its foreign exchange earnings.

With the historic fall in oil prices, Jonathan’s administration has had to introduce austerity measures and devalue the naira currency, directly affecting the standard of living for Nigerians.

Nigeria extracts around two million barrels of crude a day but imports most of its fuel as it does not have refining capacity. Subsidies are used to keep prices low at the pumps.

In late 2011, Jonathan tried to remove the subsidies, causing a general strike and mass protests, which saw them reintroduced but to a lesser degree.

 

Compliance Level

 

 

 

Meanwhile, most filling stations in Lagos did not adjust their pumps to reflect the new price tag 24hours after the Federal government directed them to do so in line with the slide in oil price in the international market.
Our correspondents,who monitored various stations in Ikorodu road,Lagos Island,Falomo,Ikeja and other environs reports that these stations sold fuel to customers at N97 litre.
At Total filling station in Onipanu,our correspondent observed that fuel was sold to customers at the old price as at the time of filing this report.

Our correspondent also observed that these stations deliberately removed their price billboard from the prying eyes of the public with a view to deceiving customers who might not known about the price change.
Some other filling stations monitored were not dispensing fuel to customers,apparently to hoard the product because of the new adjustment of the price tag.
Oriental news Nigeria correspondent gathered that the new price tag on the product jolted the stations because they have stock of fuel which were delivered at the old price but are afraid of selling at a loss.
‘’These stations smartly closed down to customers because they do not want to incur loss since new price tag is a disadvantage to most of them. But the Department of Petroleum Resources(DPR) said it will do everything within its mandates to ensure compliance with the new directive on price slash of petrol,which was announced on Sunday by the Minister of Petroleum Resources.
A senior official of the agency said that all the zonal offices of DPR will swing into action as from today to monitor compliance assuring that DPR would not compromise industry standard to ensure that the public are not cheated by fuel marketers

President of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN),Comrade Olabode Johnson told our correspondent that his union would also join the monitoring team to ensure compliance of marketers with the new price regime.

 

Oriental news Nigeria can authoritatively report that Petroleum dispensing outlets in Lagos today continued to sell Premium Motor Spirit (PMS) also called petrol at old price of N97 per liter even after federal government directive on pump price reduction to N87 per leader took effect mid night of Sunday.

 

 

It was further observed that filling stations operated by both major and independent marketers in most parts of the state sold the products to motorists at N97 irrespective of government new policy.

 

At Mobil filling station and Oando dispensing outlet in Maryland attendants were operating at the old price. Also Total along Airport road, Conoil filling station at Ikeja,MRS Ojota were all selling at the old price.

 

A filling station manager with one of the major marketers told our correspondent that the management has not directed them to revert to the new price.

 

‘We were initially asked to shut down the station until stock of available product is taken but we changed our mind so as not to create panic among the people but it is not something we are going to do immediately after all government reached the decision only yesterday and we need to do our checks and review our operations’ he explained.

 

He said however that in the next twenty four hours there is likelihood of total compliance, but he added that why some of them are reluctant to comply immediately is that the N87 per liter may not be realistic.

 

‘If you ask me I tell you that we marketers are agitating for about 50% downward review given the current price of crude oil in the market so I believe government will further crash the price and we want until we get there compliance will be immediate, however, the marketers are meeting to review the situation’ he said.

 

Also motorists who spoke to our correspondent said he did not expect the marketers to comply immediately.

 

A cab operator Demola Odumosu, said the marketers are dubious that if it was increase in price they will immediately effect it and even hoard the product.

 

On whether this minor adjustment will reduce transport fare, Okunola said it was too insignificant adding that petrol is not a major factor contributing to fare increase. He listed other factors to include police extortion and rising cost of spare parts.

 

‘In fact the general economic situation determines what we charge because we pay rent, buy food stuff from open market and pay school fees so if all these things go up we increase, so now we are not thinking of that even if government reduce it to N50 per liter’ he explained.

 

 

Meanwhile, a leading Human Rights organization in Nigeria the Committee for Democracy and Rights of the People (CDRP) has questioned the economic rationale behind the federal government reduction of the price of Premium Motor Spirit (PMS),insisting the decision is never in the interest of the masses and therefore parochial and politically motivated .

In a statement by the Acting National Coordinator of the group – Comrade Saka Waheed, the group said that even at N87 the price is still arbitrary in the face of near worthless global oil.

“The natural economic expectation of our organization is that the price of petroleum would drop in conformity with the current global fall in the price of the commodity. Therefore, it is strange and parochial to hear that the federal government is celebrating paltry #10 reductions. A careful review of government action thus far has clearly shown that the federal government has not learnt from the aftermath of January 1st 2012 subsidy protest, they are about to impose a reverse subsidy on the populace. In case the government does not know, the main message of the 2012 protest was that there is a limit upon which government can take people for granted” Comrade Saka stated.

The group therefore  emphasized that the government have no basis to keep the retail price of PMS at N87 and asked government to revert to N65 with immediate effect.

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