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N97 Per Litre: TUC Vows War With Buhari

Trade Union Congress (TUC) has declared war with government over the plans to increase the pump price of petrol next year even as marketers in the country distance themselves from the proposed price hike.

According to the market players and labour leaders that spoke to our correspondents on the hike in the price of petrol proposed by government in the 2016 fiscal estimates is at variance with prevailing market forces which currently compels price reduction across global petroleum products market.

Whereas marketers criticise the planned price hike as inconsonant with price trends across the globe, the Trade Union Congress vows it would resist any plan to impose arbitrary fuel price increase on impoverished Nigerians. President of TUC, Comrade Bobboi N97 Per Litre: TUC Vows War With Buhari Kiagama, stated yesterday that senior pan industry workers’ union would stand in the way of implementing the price increase until government provides convincing criteria and associated economic palliatives that would cushion the effect of the inevitable transportation crisis.

Expressing anger at the arbitrary decision to hike fuel prices at a time of economic hardship in the country, Comrade Kiagama also faulted the decision for not using market forces as parameters for taking market price decisions. He accused the government of throwing up price hike as basis for deregulation of the market without consultation with stakeholders.

He alleged that President Buhari’s government has unfortunately taken price adjustments in the domestic fuel market as a fund raising strategy to generate funds to finance his programmes and policies. He said that the government has come to power without any credible plan to fund its agenda and thus has resorted to imposing indirect fuel tax on Nigerians through pump price manipulation.

He referred to the past administration of President Goodluck Jonathan, which, he said, consulted widely on the use of fuel price savings for infrastructural development under the controversial SURE-P where, according to him, all stakeholders are represented in the management of the fund.

Both the labour leaders and marketers blamed distortions and misalignments in the new economic agenda of the federal government for the rising cost of petroleum products in the domestic market at a time the world is enjoying massive reduction in fuel prices.

Some of the marketers that spoke on the conditions of anonymity for fears of being tagged by the government faulted the planned price hike as excessive over-recovery, pointing out that the domestic price for petrol was already too high at N87 following the steep fall in oil prices.

One of them stated that the retention of fuel prices at the height where it was at the time of global crude oil price averaged $120 per barrel is no longer justifiable now that crude oil has fallen below $50 per barrel. He stated that the prices of crude oil grades in the global market space have remained the traditional benchmark for prices of refinery products, pointing out that crude oil is primarily the feedstock for refineries that produce fuel.

Another marketer also pointed out that price movement for both crude oil and refinery products flow proportionately, saying that petrol price should fall by over 50 percent of the expected landing cost in the templates of the Petroleum Products Pricing and Regulatory Agency (PPPRA).

However, PPRA puts the expected open market price (OMP) comprising the landing cost of imported petrol plus marketers margins at N91.98 per litre, N5.02 per litre lower than the proposed N97 per liter proposed by the government for 2016.

Although he did not speak to our correspondents yesterday, the Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), Mr. Thomas Olawore, had earlier admitted there was overrecovery when the prices of crude oil crashed.

He however pointed out that protracted subsidy debts, associated cost of funding, import associated costs, port charges and falling value of the Naira have all summed up huge cost on imported petroleum products and eroded the savings that would have been available to Nigerian consumers. All the import associated costs built on the pump price of fuel in the country, according to Comrade Kiagama could be eliminated by fixing the nation’s downstream and midstream sections of the petroleum industry.




– Sopuruchi Onwuka

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