Pump Price Hike: Nigerians Are Yet to Understand the Implications of Fuel Subsidy Removal

Pump Price Hike: Nigerians Are Yet to Understand the Implications of Fuel Subsidy Removal

The increase of petroleum pump price to N151.56 has resulted in uproar. There was wide condemnation of the increase by Nigerians following the announcement by the Pipelines and Product Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Commission (NNPC), on Wednesday.

The PPMC’s, D.O Abalaka announced the increment through a statement which reads: “Please be informed that a new product price adjustment has been effected on our payment platform.

“To this end, the price of Premium Motor Spirit (PMS) is now one hundred and fifty one naira, fifty-six kobo (N151.56k) per liter. This takes effect from September 2, 2020.”

Upon the news, Nigerians took to social media to register their displeasure over the development.

“Misroad & mishap of a government we have, not minding the rippling effect on the citizenry, we can’t call this insensitivity again, this is just pure Evil!” Engr. Segun Akande wrote on Twitter. “How do you expect citizens to live with these erroneous eroding steps, when government is deliberately inflicting excruciating pain on its people? We need God’s intervention, this government is callous.”

“Oh God, have mercy on us, the masses, the government continues to increase prices of essentials; petrol, power, taxes, salary remain static for those that are working, majority are jobless, no income for many, oh God have mercy on us,” Modupe Lawal said.

They were among the many voices that called out the federal government for the fuel price hike. Others shared video clips of the 2012 national protest, instigated by former President Goodluck Jonathan’s attempt to remove the petrol subsidy then. They said that the most glaring message in the video clips is that many of the protesters are in government today.

Though some members of the Nigerian House of Representatives have waded into the matter, ordering PPMC to halt the implementation of the new pump price, the reversal seems unlikely.

In a statement on Wednesday, the Minority Leader of the House Ndudi said the pump price increment is unacceptable as it would result in further hardship for Nigerians.

“The increase is unacceptable as it will result in an increase in the already high cost of consumer goods and services, and worsen the current economic hardship being suffered by Nigerians,” he said, adding that “the minority caucus in the House of Representatives rejects the announced increase in the pump price of fuel.”

Consequently, the Minority Caucus ordered PPMC to immediately rescind its announcement and revert to the former price.

In solidarity with Nigerians, the Nigerian Labour Congress (NLC), who led the protest back in 2012, rejected the price hike. The president, Comrade Ayuba Wabba said the Federal Government is taking Nigerians for granted by inflicting more hardship on them in the face of a global health crisis.

“It is like Nigerians are being taken for a ride, the increase in price of petroleum is like adding insult to injury. The increase in price of petroleum has happened now more than three times in three months, only yesterday (September 1) they hiked the tariff of electricity. And to compound it they also reduced the interest rate of savings which affects mostly the poor and the vulnerable,” he said.

While the reactions of both the House’s Minority Caucus and the NLC are being applauded by many, it shows that most Nigerians are yet to understand the implication of fuel subsidy removal.

In March, the NNPC GMD, Mele Kyari announced that fuel subsidy has been totally removed and there is no going back to it.

“There is no fuel subsidy anymore in Nigeria. It is zero subsidy forever,” he said. “There would be no resort to either fuel subsidy or under-recovery of any nature. NNPC will play in the petroleum marketplace, just like another marketer in the space.”

The removal of the fuel subsidy means that the Federal Government will no longer pay for Nigerians to buy PMS at a cheaper rate, they will now have to buy according to global oil prices. It’s a reality many failed to grasp immediately due to the downturn in the oil market.

Back in March, there was a massive decline in oil prices due to COVID-19 pandemic, so that the government had to reduce fuel price from N143 to N125, and subsequently reduced it to N123.50 in April. Therefore, the impact of the subsidy removal wasn’t immediately felt. However, as economies began to open, oil demands increased accordingly, forcing Nigerian petroleum marketers to increase the pump price.

Today, the Brent Crude is $44.56, which is a significant growth from the past decline and a big trouble for Nigerians. Alas, many are oblivious of the bitter reality of rising crude prices, which means that they will continue to buy fuel at higher cost as long Nigerian refineries are not working and the government is not paying to subsidize the cost.

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