The Rising Cost of Petrol – By Arnold A. Alalibo

Posted by admin Arnold Alalibo, Articles, Columnists, NNP Columnists, Oil Politics Friday, August 21st, 2015

By Arnold A. Alalibo | NNP | August 21, 2015 –

In the last few months, Nigerians have not ceased from fussing over the ever rising cost of premium motor spirit, PMS, popularly called petrol. Millions of Nigerians groan as the product sells above N110 while queues by motorists have continued to grow across filling stations. The escalating situation has forced motorists and consumers to patronize the black market.
The current price regime of PMS is far and above the official price of N87 per litre. Latest figure from the Petroleum Products Pricing Regulatory Agency had it that the federal government subsidizes the product with N45.28. Since this is the case Nigerians deserve explanation on why petrol is getting out of reach of the commoner.
In most filling stations across the country fuel is bought between N130 and N170 despite the federal government’s avowed commitment and assurances that fuel subsidy would remain. President Buhari has always told Nigerians that he would not remove petrol subsidy because of the effect such action would have on the citizens.
But the current development denies every pronouncement of the government on its position on subsidy. For instance, in Port Harcourt most filling stations sell petrol between N100 and N130. Reports from Abia State indicate that the commodity is purchased at astronomical cost. Also in Imo State it is stated that the product is sold above the official pump price.
Most filling stations in Kano sell fuel for between N110 and N130 per litre. In Calabar, Osogbo, Bauchi, Ilorin and Ekiti the product is sold at between N110 and N150. In Ibadan, the Oyo State capital, 95 percent of the filling stations no longer sell petrol because they cannot get the commodity at a cost that would enable them sell the product at the official pump price. The position is the same in other states.
The decadence in the petroleum sector has been attributed to the price disparity of fuel. Whereas the major marketers sell at N87 per litre, independent marketers vend it for between N103 and N110. Added to this predicament is the fact that the fuel depots that would have eased the transportation of petrol are not functional.
Nigerians are unhappy with the situation as many of them have expressed disappointment with the present administration over the dogged fuel crisis and the blame game that has characterized it. Given the tough stand and seriousness of the government on virtually every issue in the country, they expect Buhari to tackle the menace frontally.
I agree with them. If there is anything the president has to do to stabilise the country, it is first to ensure regular power and stability of petroleum pump price at N87 per litre. The current situation is not abating because the president has failed to sanction dealers that have been defaulting on the regulated price. The silence of the federal government on this salient issue gives the impression that it is completely ignorant of the problem.
What is even more agitating is the claim by experts in the industry that the petrol subsidy arrears have been increasing by geometric proportion in spite of the raise in the price of the commodity by marketers. It is said that subsidy arrears now remain at N291 billion.
Recently, the Executive Secretary, Depot and Petroleum Products Marketers Association, Mr. Femi Adewole, confirmed to the media that the subsidy arrears had been on the increase. He also confirmed that some cargoes containing fuel had been imported into the country.
If marketers still import fuel and sell at the price of their choice, why is the commodity unavailable at most filling stations across the country? Is the product in short supply? While the issues to interrogate are many, the federal government must understand that fuel is an essential commodity globally and that is why the price has to be stable. A situation where major marketers sell the product at a price greatly different from what independent marketers sell it is unacceptable.
It is for this reason the Department of Petroleum Resources and other relevant agencies have to ensure that all marketers comply with government’s directive. If fuel depots in the country are not functional, what stops the authorities from making them work to reduce the cost incurred in transporting the commodity?
It remains to be seen how the government would tackle this problem. All we want is that a firm stance has to be taken on the issue to give succor to the people. Nigerians are waiting to see whether the Buhari’s administration will handle the problem differently and bring about a solution. If in spite of the current subsidy regime the problem persists, then something is wrong somewhere that requires a thorough examination.wp_posts