Posted by By ISMAIL OMIPIDAN, Abuja and MARIAM AGBOOLA, Jos on
There are strong indications that the pains suffered by Nigerians before the reversal of fuel pump price from N75 to N70 by the President Umaru Yar'Adua administration may soon return, as the Presidency on Wednesday revealed that continu increase in the price of crude may lead to a corresponding increase in pump price in Nigeria.
…Say N70 per litre no longer sustainable
There are strong indications that the pains suffered by Nigerians before the reversal of fuel pump price from N75 to N70 by the President Umaru Yar'Adua administration may soon return, as the Presidency on Wednesday revealed that continu increase in the price of crude may lead to a corresponding increase in pump price in Nigeria.
According to Vice President Goodluck Jonathan, with price of crude in the international market going for $100 per barrel, the N70 pump price was no longer attractive to private investors.
Declaring open a two-day conference organized by the Senate Committee on Petroleum, (Downstream), with the theme: 'Deregulation: Your Competitive Advantage,' the vice president, who was represented by the Minister of State for Energy, Odein Ajumogobia, was, however, quick to add that his statement should not be misconstrued to mean that the Presidency was contemplating an increase in pump price, adding that the agreement reached between Labour and government following the last nationwide strike over pump increase was still subsisting and the government was bound by it.
The assurance is, however, hardly of any comfort as the Independent Petroleum Marketers Association of Nigeria (IPMAN) warned that a price increase on petroleum products may be inevitable by December in view of high cost of transporting the products from Port Harcourt to other parts of Nigeria. The solution? The Kaduna refinery must be urgently activated.
Said the Vice President: 'Today, the price of crude oil is hovering very close to the 100 US dollar. I don't know why it is the 100 dollar that we picked as the significant mark, but it is the mark that everybody is afraid of. It has not yet got there, but it is going there. And the more it gets higher, the price of refined products will also go higher.
'This ordinarily attracts a corresponding increase in the pump price, moreso when we depend on imported products since our refineries are not working.
'The retail price of petroleum product inevitably tracks the price of a barrel of crude in the international market. If the price of crude gets higher, so will the price of petroleum product that we import in the country go high.
'What that means is that the subsidy that government pays will increase as the price of crude increases. It also means that as long as petroleum prices are regulated in our country, it means that those who may have an interest in participating in the downstream have a constraint.
'No one invests in a business if he does not see how he is going to get his returns. The returns come currently from the pump price and the subsidy government pays through the instrumentality of the PPRA and the CBN where the money from imported price is paid to the importer."
Speaking earlier, Chairman of the committee, Paulker Benjamin said though the downstream sector had witnessed tremendous investment by the government in recent times, 'it is characterized by non-functioning refineries, collapsed distribution infrastructure caused by vandalism and lack of maintenance, inefficient domestic gas supply and distribution system, product hoarding, adulteration and over-pricing in some states of the federation. All these problems have brought about untold hardship to the average consumer of refined petroleum products."
Alerting the nation to the possible price hike, the National Public Relations Officer of IPMAN, Alhaji Danladi Garba Pasali, disclosed in Jos that if Kaduna refinery did not become operational soon, the pump price of petrol would increase by December; even as he disclosed that the national president of IPMAN and his deputy, Engr. Olatunde Runsewe and Alhaji Musa Felande respectively have been removed from office.
He explained that though the marketers were supposed to be reimbursed for transportation cost of petrol across the country, their claims are lying unpaid for between six months and year.
He said the association controlled 80 per cent of the total outlets of petrol in the country, stressing that the Nigeria Labour Congress (NLC) was aware of its problem and would not be taken unawares by the impending increase.
Speaking on the problem within the association, he said the national president and his deputy had been found guilty of several offences leveled against them and a vote of no confidence passed on them at the extraordinary general meeting held at Yankari Games Reserve.
In their place, he said Alhaji Tunji Adeniji, from the western zone, has been elected to take over as the national president while Alhaji Abubakar Suleiman Turaki is now the deputy national president.
The national publicity officer appealed to members to maintain peace and cordiality and urged them to cooperate with the new leadership.