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Brushing aside mounting opposition, the Federal Government on Wednesday gave the nod to fresh increase in prices of petroleum products.
Brushing aside mounting opposition, the Federal Government on Wednesday gave the nod to fresh increase in prices of petroleum products.
It gave the Petroleum Products Pricing and Regulatory Agency the endorsement to negotiate with marketers and arrive at 'the best prices" for the products.
The Nigerian National Petroleum Corporation is expected to announce a new price regime on Friday.
But the Senate is not giving up on seeking legislative intervention towards achieving a long-term price stability.
A bill proposing to establish the Petroleum Products Prices Stabilisation Fund on Wednesday passed through its first reading in the Senate.
At the close of the weekly Federal Executive Council meeting in Abuja, the Information and National Orientation Minister, Mr. Frank Nweke Jnr., said, the PPPRA enjoyed the Federal Government's full support in whatever decisions or prices that are eventually arrived at.
He told journalists, "We are not unaware of the speculations and postulations on this issue in the last couple of weeks.
"The current administration has a policy of deregulation and liberalisation of the downstream petroleum sector."
According to him, what the policy of deregulation implies is that operations in the petroleum sector will be guided by best global practices.
Nweke said, "It means that whatever it takes or costs to do business or procure fuel in the sector in other places is what will operate in Nigeria.
"That is why the Federal Government established the PPPRA to ensure that Nigerians are not shortchanged, but get the best prices.
"It is the responsibility of the PPPRA to negotiate with oil companies and to arrive at the best prices for these products.
"The Federal Government does not regulate prices; PPPRA has responsibility for that and they have been interfacing with oil companies."
The minister noted that "very soon, they (the PPPRA and the marketers) will ultimately arrive at an equitable solution on that matter."
He argued that additional monies realised from previous increases in the prices of petroleum products had been well used for the benefit of the masses.
He cited the ongoing construction of 19 new power plants to boost electricity supply as one of the benefits accruing to the masses.
Nweke said the Federal Government was aware of the hardship the increase in prices of petroleum products would bring to the masses and had therefore put in place safety nets to cushion the effects.
According to him, the noise over plans to increase the prices could be likened to the initial high cost that trailed the introduction of GSM services.
"There was cacophony over the initial high cost of telecommunications services, but after three years and with over 10 million lines, prices have drastically reduced," he noted.
Industry sources told our correspondents in Abuja that NNPC is likely to announce the price increase on Friday.
Under the deregulation policy, marketers as well as NNPC could import petroleum products and sell at the international market price.
Going by the trend at the international market, the price per litre of petrol may not be less than N71.
As at August 15, the PPPRA's price template for petrol was N75.53 per litre.
While the expected template for AGO (diesel) was N78.79, that of DPK was put at N81.55.
A source at the NNPC who reacted shortly after the government made its stand known said, "We have to obey FEC's directive.
"We will however still have to await the final go-ahead from the PPPRA, which is statutorily charged with the responsibility to approve fuel price."
With war songs raging over the planned increase in prices, the Chairman of the Senate Committee on Labour, Mr. Bassey Ewa-Henshaw, has sponsored a bill seeking the establishment of the Petroleum Products Prices Stabilisation Fund.
When passed, it will also guarantee full cost recovery to suppliers, thereby ensuring constant and adequate supply of products.
The proposed law will create a modulating mechanism that will allow prices of petroleum products to fluctuate, while government will draw from the fund to subsidise local consumption.
For instance, if the benchmark in the budget is put at $30 per barrel and the international crude price stands at $65, the bill demands that five per cent of the difference be put into the Fund which will in turn be used to subsidise local consumption.
Other sponsors of the bill are the Deputy President of the Senate, Alhaji Ibrahim Mantu, and the Chairman of the Senate Committee on Media and Public Affairs, Mr. Victor Ndoma-Egba, SAN.
The bill demands that in January of every year, the PPPRA should set the approved retail pump prices of petroleum products, taking into account domestic economic and market conditions and international market prices.
A board called the Petroleum Products Prices Stabilisation Fund Management Board, which shall be a body corporate, will administer the Fund established under the bill.
To be headed by a chairman, the board will have representatives from the petroleum sector, Ministry of Finance, NNPC, petroleum products marketers, Nigeria Labour Congress and Trade Union Congress.
Others are the Nigeria Employers Consultative Association, chambers of commerce, manufacturers' association, the civil society, the Petroleum and Natural Gas Senior Staff Association of Nigeria, and National Union of Petroleum and Natural Gas Workers, the Central Bank of Nigeria and the Accountant-General of the Federation, among others.
But the NLC has restated its opposition to the plan to jack up the prices, describing it as a huge joke.
The Auditor of the NLC, Mr. Bright Anokwuru, in a telephone interview said the move showed that the government had lost sight of its responsibility to its citizens; and that the citizens will also not honour such government.
He said, 'As you can see, our government has lost focus and they do not know the difference between being elected by the people and authoritarianism. What the administration of President Olusegun Obasanjo has been doing since its assumption of office is autocratic, and we are not going to tolerate this."
The President of NUPENG, Mr. Peter Akpatason, said there was every indication that the congress would as usual lead other labour and civil society groups against the planned increase.
'This is a complete betrayal of confidence which Nigerians has in this government," Akpatason added.
The General Secretary of the Congress of Free Trade Unions of Nigeria, Mr. Didi Adodo, said it would be a great mistake for the government to increase fuel prices as approved by the FEC at this time when majority of Nigerians were suffering from acute hunger and joblessness.
He added, 'I assure you that Nigerians will resist the increase with all their strength because it is a rape on their right to good standard of living. This is a high level of irresponsibility on the part of the government.
The General Secretary of the Trade Union Congress, Chief John Kolawole, said the government had courted chaos through the decision of the FEC, and that Nigerians should 'not hesitate to give it to them."
'Nigerians should rise up against this injustice and should ensure that their rights are defended."
The pan-Yoruba socio-cultural group, Afenifere and Committee for Defence of Human Rights, in separate reactions, also enjoined all Nigerians to resist the hike.
Afenifere, in a statement by its National Publicity Secretary, Mr. Yinka Odumakin, alleged that the government was being pressurised by external agencies to raise the cost of fuel.
"We are compelled to issue this final warning based on the statement by the Chairman of the PPPRA, Chief Rasheed Gbadamosi, which has given the go-ahead for new rounds of price hike," it added.
The CDHR said it was ready to team with other groups to resist the hike.
In a statement by its National Publicity Secretary, Mr Olugbenga Soloiki, the group said any increase in fuel prices now would further compound the woes of the majority of Nigerians.
The PUNCH, Thursday, August 25, 2005