The full deregulation of the downstream oil sector might have taken off with the new template of petrol pump pricing. Yesterday, the Nigerian National Petroleum Company Limited (NNPCL) adjusted its retail pump price to N998 per litre in Lagos and N1,030 in Abuja.
It was N855 per litre in Lagos and N916 in Abuja in the September template. The oil giant, it was learnt, bought the product at N977 per litre from Dangote Refinery and added N21 for costs and taxes.
NNPCL is not bearing any shortfall, unlike last month when it announced that Dangote Refinery sold to it at N898 per litre. Dangote Refinery disputed the claim and did not state the amount it sold the product. “The new price announced yesterday is based on the N977/litre we are buying from Dangote,” an NNPCL source said. “What we announced is based on Dangote pricing. NNPCL buys N977 per litre from the refinery. “When the refinery reduces the pump price, NNPCL will reduce it.”
Asked if the new pump price was based on President Bola Tinubu’s directive that crude be sold in naira to Dangote and modular refineries from October 1, the source directed The Nation to the Federal Ministry of Finance or Federal Inland Revenue Service (FIRS).
Dangote Refinery spokesperson, Anthony Chiejina, said he could not speak on the telephone because of where he was. He promised to get in touch. As of 10 pm, he did get in touch.
Lagos Chamber of Commerce & Industry (LCCI) Director General, Chinyere Almona, said most Nigerians had expected that with the planned take-off of naira-crude-sale to Dangote Refinery, pump price would naturally crash. She said: “The crude Dangote Refinery is using currently was bought at an international rate outside the confines of Nigeria and what we are witnessing today is market forces at play.’’
According to her, the increase in the price of petroleum products is made worse by the government stopping subsidy payments. Almona added that since the current product used by Dangote Refinery was bought in foreign currency, “it cannot be sold lower than how much it was bought.’’ Centre for the Promotion of Private Enterprise (CPPE) Chief Executive Officer, Dr Muda Yusuf, said the full deregulation did not take cognisance of social, economic and political implications.
According to him, a lot of measures should have been put in place before such a decision is taken.
The Nigeria Labour Congress (NLC) condemned the hike, saying it would worsen poverty and cause a drop in production and job losses.
The Labour Centre asked the Federal Government to reverse the latest increase.
Labour said in a statement by its President Joe Ajaero that it was unfortunate that “the only thing this government is known for is the increase in the pump price of petrol.’’
The statement reads: “We are dismayed by the latest increase in the pump price of petrol.
“It looks like the only thing this government is known for is an increase in the pump price of petrol without commensurate capacity of Nigerians or mitigating measures.
“Even following the logic of market forces, we find it an aberration that a private company (NNPCL) is the one fixing prices and projecting itself as a hegemonic monopoly.
“We challenge the government to go to the drawing board and present us with a blueprint for inclusive economic growth and national development instead of this spasmodic ad hocism’ and palliative policy. “It needs no stating the fact that the latest wave of increase has grossly altered the calculations of Nigerians once again at a time they were reluctantly coming to terms with their new realities. “It will further deepen poverty as production capacities dip, more jobs lost with multidimensional negative effects.
“In light of this, we urge the government to immediately reverse this rate hike as previous increases did not produce any good results. People only got poorer. “But more fundamentally, the government should be bold enough to tell Nigerians in advance the destination it wants to take the country.”
