With End of Subsidy, NNPC Raises Petrol Price to Between N488 and N557 Per Litre

Nigerian National Petroleum Company (NNPC) Limited, on Wednesday, adjusted the pump price of petrol by nearly 200 per cent, from N195 per litre to between N488 and N557 nationwide.

The development followed the announcement by President Bola Tinubu during his inaugural address on Monday that fuel subsidy was “gone”. Tinubu promised to re-channel the expected savings to education, health and other sectors.

But Nigeria Labour Congress (NLC) expressed displeasure over the NNPC pricing template, describing it as vexatious. NLC President, Joe Ajaero, in a statement, said the union was worried that the Tinubu administration, despite on-going meetings of stakeholders in the oil and gas sector to try to manage the unilateral decision of the government to end fuel subsidy, went ahead to announce a new regime of prices.

Ajaero declared that you could not ask a partner to negotiate at gunpoint.

At the same time, the Human Rights Writers Association  (HURIWA) condemned the price review as wicked, obnoxious, brutish, and absolutely unacceptable. HURIWA called on Nigerians not to suffer and smile or die in silence but to take peaceful steps to demonstrate publicly against the wicked act of the new government.

In a similar vein, Nigerian Employers’ Consultative Association (NECA) called on the federal government to approach the removal of petrol subsidy strategically to avoid the escalation of inflation and worsening of already bad socio-economic indicators, like employment, and poverty per capita income, among others.

However, Major Oil Marketers Association of Nigeria (MOMAN) advised Nigerians to adjust themselves to the new reality for the good of the country’s economy.

NNPC said it had been funding subsidies to the tune of N400 billion monthly. Group Chief Executive Officer of NNPC, Mele Kyari, disclosed that the federal government still owed the firm N2.8 trillion spent on petrol subsidy.

Kyari lamented that since the provision of the N6 trillion in 2022, and N3.7 trillion in 2023, the national oil firm had not received any payment whatsoever from the federation. He said NNPC made the petrol subsidy payments from its cash flow.

He said, “That means the federal government is unable to pay and we have continued to support this subsidy from the cash flow of the NNPC. That is, when we net off our fiscal obligations of taxes and royalties, there is still a balance that we are funding from our cash flow. And that has become very difficult and it is affecting our other operations.”

In a schedule, detailing the new rates, petrol prices were adjusted upward from between N189 to N194 per litre to N537 in Abuja and other North-central states.

In Lagos and other South-west states, a litre of petrol now sells for between N488 and N500 per litre.

In the South-east, the price will range from N515 to N520, while in the North-west, the price of the product was raised to between N540 and N545. In the North-east, it moved from N199 to from between N550 and N557 per litre.

For the South-south, petrol is now from N511 to N515 per litre.

Nigeria’s subsidy budget of N3.6 trillion for this year, expires in June 2023.

Seventeen months ago, former President Muhammadu Buhari shifted the implementation of subsidy removal by 18 months, which would effectively expire this month.

However, it is expected that other independent and major marketers will charge more for petrol, following the pattern in the past, where NNPC prices are usually lower than the NNPC rates.

Confirming the price hike through its Chief Corporate Communications Officer, Garba Deen Muhammad, NNPC informed its customers that it had adjusted its pump price across the retail outlets, “in line with the current market realities.”

Muhammad stated, “As we strive to provide you the quality service we are known for, it is pertinent to note that prices will continue to fluctuate to reflect market dynamics.

“We assure you that NNPC Limited is committed to ensuring a ceaseless supply of products. The company sincerely regrets any inconvenience this development might have caused.

“We greatly appreciate your continued patronage, support and understanding through this time of change and growth.”

It was not immediately clear what the current ex-depot price was at the moment to determine the price of the commodity in other filling stations owned by major and independent products marketers.

Ex-depot price is the cost paid by independent petroleum products marketers to lift products from NNPC fuel depots before transportation to their retail outlets for distribution. At the moment, NNPC is the sole importer of petroleum products.

Usually, to arrive at the final retail price at the filling station, the marketers would add the cost of transportation, storage, throughput charges and other charges spelt out in the pricing template by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

For years, especially during the Goodluck Jonathan era, Tinubu was a prominent critic of the subsidy removal attempts. He supported nationwide protests at the time against the move by the Jonathan government.

The chaotic reaction to the removal of petrol subsidy announced by Tinubu on Monday continued, with many filling stations across the country still hoarding the product, while the few that opened to customers sold at exorbitant prices.

Fuel retailers have shut their gates to motorists, thus worsening the petrol situation nationwide. Many filling stations in Abuja had customers’ vehicles queuing to buy fuel extending several kilometres.

Commuters were stranded at various bus stops nationwide.

NLC expressed displeasure over NNPC’s new pricing template, describing it as vexatious.

Ajaero, in a statement, said the union was worried that Tinubu, despite the on-going meetings of stakeholders in the oil and gas sector to try to manage the unilateral decision by the government, went ahead to announce a new regime of prices.

He described it as an “ambush”, stating that it runs against the spirit and principles of social dialogue, which remains the best platform available for the resolution of all the issues in the petroleum downstream sector.

Ajaero stressed, “Government cannot in one breathe be talking about deregulation and at the same time fixing the prices of petroleum products. This negates the spirit of allowing the operation of the free market unless the government has as usual usurped, captured or become market forces.”

He said it was unacceptable, insisting that good faith negotiation is key to reaching any agreement.

The NLC president stated, “What the government has done is like holding a gun to the head of Nigerian people and bringing them under pressure. We call on the federal government to immediately instruct the NNPC to withdraw this vexatious pricing template to allow free flow of discussions by the parties.

“Nigerians would not accept any manipulations of any kind from any of the parties, especially from the representatives of the government.

“Our commitment to this process is buoyed by the fact that all the parties would be committed to ensuring that it is carried out within the ambits of liberty without undue pressure.

“The release of that template may not allow us to continue if nothing is done to withdraw it so that the dialogue can continue unhindered. It is clear that the government is actually trying to scuttle the process.”

According to the labour union, as it stands, the federal government has become fixated on its chosen course of action. It said such an attitude would in no way help consultations and dialogue.

“There must be flexibility to allow concessions and reasonable accommodation that will produce the best result for the Nigerian people. This is what we all seek at this time,” Ajaero asserted.

Deji Elumoye, Chuks Okocha, Emmanuel Addeh and Peter Uzoho, Dike Onwuamaeze, Ugo Aliogo 

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