APC: Fuel price slash, mere tokenism

The All Progressives Congress (APC) has accused the Federal Government of making a show out of deceit by its so-called fuel price reduction, saying a 10.3 per cent slash in the price of petrol (from N97 to N87) is a mere tokenism at a time the price of crude oil has crashed by about 60 per cent.
In a statement in Lagos on Monday by its National Publicity Secretary, Alhaji Lai Mohammed, the party said the pump price of a litre of fuel should not be more than N70, meaning that at N87 per litre, the government is forcing Nigerians to subsidise the massive corruption in the oil sector by N17 for every litre of fuel.
”When crude oil was selling at $100 per barrel, the landing cost of PMS without subsidy was N125 per litre. Now that the oil price has crash to about $44 per barrel, landing cost without subsidy is about N65 per litre. The same goes for diesel which should not sell for more than N90 per litre,” it said.
APC said while governments of countries which are not as economically endowed as Nigeria have reduced the pump price of fuel as far back as early January 2015, Nigeria that is the world’s sixth largest producer of oil is just announcing a price slash that is far below those countries.
”Early this year, Zambia slashed the price of petrol by 23 per cent while Tanzania reduced the pump price of the product by 16%. In the US, which until recently was importing crude oil from Nigeria, the price of fuel has fallen for 113 consecutive days as of January 16. Therefore, the 10.3% price slash in Nigeria is too meagre, too late,” the party said.
It said the real reasons that the Nigerian government has delayed slashing the price of imported petroleum products following the crash in crude oil prices are the massive corruption in the oil sector and lack of political will on the part of the country’s leadership.
”With Nigeria depending on importation of petroleum products to meet about 90% of its domestic consumption, the country is relying heavily on term contracts entered into with petroleum product trading companies to meet its domestic demand. It is possible that the petroleum products pricing formulas embedded in these contracts, which generally run for up to 1-1/2 and in some cases 2 years, have not anticipated these low prices.
”Therefore, unless the government moves to renegotiate the contracts now, it may not reap the full benefits of the decline in petroleum prices. But here is the catch: Since the government and its agents have skimmed off huge ‘commissions’ from the firms with which the term contracts were signed, it could not possibly go back and renegotiate those contracts or go into new forward contracts that will reflect the current reduction in crude oil prices.
”It takes a strong willed, determined and transparent leadership to immediately call in the petroleum products contracts for re-negotiation, as this will represent a huge blow on corruption in the sector since clearly ‘commissions’ would have been paid by petroleum product traders on the existing contracts. This explains the token reduction in fuel price, which the government must have hoped will fool an unsuspecting public, especially a few weeks to elections,” APC said.
The party also wondered why the PDP-led federal government had to wait for a widely-publicized call from the APC Presidential Candidate, Gen. Muhammadu Buhari, and some other concerned Nigerians before doing what the government of other countries in Africa and elsewhere around the world have already done: slash the price of petroleum products commensurate with the fall in crude oil prices.
It called on the PDP federal government to immediately slash the price of petrol to 70 Naira per litre and the prices of diesel and kerosene to nothing more than 90 Naira per litre each way, and stop stealing from Nigerians who have been pauperized by its bad record of governance since 1999.
Meanwhile, the Department of Petroleum Resources (DPR) on Monday urged all filling stations to adjust their pump price per litre of fuel to N87 from N97 as directed by the Federal Government to avoid sanctions.
Mrs Chioma Njoku, DPR Head of Operations, Lagos Zone, said that the department had begun the monitoring of filling stations to enforce adherence to the directive.
She said: “DPR will ensure that the new price regime stated by the government is complied with and any filling station found wanting will be sanctioned.
“We have commenced full operational check at most filing stations in Lagos to ensure that they adjust to N87 per litre.”