Fuel price: Reject W’Bank N750/litre proposal, NLC warns FG - LagosTrend

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Thursday, December 14, 2023

Fuel price: Reject W’Bank N750/litre proposal, NLC warns FG


The Nigeria Labour Congress, on Thursday, warned the Federal Government against heeding the advice of the World Bank to increase the pump price of Premium Motor Spirit popularly called petrol to N750/litre.

The NLC’s Head of Information, Benson Upah, in an interview with The PUNCH, said any further increase in the price of petrol would lead to anarchy in the country.

He, therefore called on the government to reject the proposal of the World Bank that petrol should sell at about N750/litre, as against the current rate of between N620 and N650/litre in most locations across the country.

This came as oil marketers explained that the cost of PMS should be around N1,000/litre had it been that the government not subsidising the product.

But the government, on Thursday, denied the claims of marketers and the World Bank as regards the reintroduction of subsidy on petrol in Nigeria.

The World Bank, on Wednesday, asked the Federal Government to stop the subsidy payment on petrol and raise the cost of the product to N750/litre.

It said the Federal Government might still be paying the subsidy as fuel prices in Nigeria were currently not cost-reflective, stressing that Nigerians should pay about N750/litre for PMS as against the current price of N650/litre.

It is almost single-handedly responsible for the ruination of the economies of countries of the global south for which it prescribes one solution for all ailments.

“It does not care what happens to Nigeria or Nigerians so it could from its perch in Washington say whatever it likes or push around our leaders like house-helps.

“The truth, however, remains that the present regime of the pump price of PMS has all but destroyed the country. To now ask the government to raise it to N750/litre is to invite anarchy upon the land.

“The World Bank is so hypocritical it fails to see the nexus between price and capacity. The minimum wage in Nigeria for a privileged few is N30,000. The same minimum wage in the United States where the law is enforced is N1.5m.

“In light of this, if the government knows what is good for it, it should ignore the World Bank but must remain committed to fighting inherent corruption in the downstream sector of the petroleum industry. It must also cut down the high cost of governance.”

FG denies subsidy

But the Federal Government denied the claims of the World Bank on the continued payment of the fuel subsidy on petrol.

In  an interview on Channels Television on Thursday, the Minister of Information and National Orientation, Mohammed Idris, said President Bola Tinubu had made it clear from his first day in office that his government would not sustain the payment of subsidy on petrol.

According to Idris, the removal of the petrol subsidy had led to an increase in the revenue accruing to the Federation Account.

“Subsidy is gone, and the President told Nigerians from his first day in office that there won’t be subsidy (on petrol). It is because subsidy has gone that we have so much money available for the government to do so many things. Of course, it’s never enough, but fuel subsidy is gone and it’s gone for good,” the minister stated.

He added, “There are instances where the government needs to come in to see that things don’t go so bad. That’s the responsibility of the government. Every rule will also have its self-adjusting mechanism, but I can assure Nigerians that the subsidy is gone.

“If you look at the monies accruing to the Federation Account and the kind of money the states are receiving, you would know that everybody desires that subsidy should go. What do we do with that subsidy, I think, is the next question. We need to scrutinise that so that Nigerians would benefit from the subsidy that has been taken away. Subsidy is gone.”

Marketers project

Reacting to the argument by the Federal Government that the petrol subsidy had gone, the National Secretary of the Independent Petroleum Marketers Association of Nigeria, Chief John Kekeocha, said this was not true.

Kekeocha said the government was afraid that the removal of the subsidy would lead to unrest.

“It is funny when government personnel who don’t know the realities on the ground come to the open and mess the government up. How can you say that subsidy is gone? No reasonable person who knows the dynamics of the market globally will say that.

“As we speak, a pound is about N1,480 or more, and a dollar is about N1,200 or more. So what is the magic to use and say subsidy on PMS is gone? The government is subsidising PMS because if it gets to N1,000/litre the country could be set on fire.

“So the government is apprehensive. Just like I keep saying, the things they ought to have done before the removal of subsidy on petrol, were not done. They are now beginning to sit with organisations and try to know what they ought to have done.

“So no reasonable government personnel who knows the politics or dynamics of the downstream oil sector would come out and say subsidy has been removed. There is a subsidy, the government is subsidising the product which is why you can see fuel at N650/litre,” he stated.

Asked whether he shared the view of the World Bank that the pump price of petrol should be N750/litre, Kekeocha replied, “Even at N750/litre it is still subsidised. What is the cost of fuel in London? It is about N1000 to N1,200/litre. So that is the range we should be looking at.”

Earlier, the National Public Relations Officer, IPMAN, Chief Ukadike Chinedu, told one of our correspondents that the subsidy on every litre of petrol should be about N400 currently.

Recall that the minister had revealed during a panel session at the World Bank’s Nigeria Development Update Release, that the government was ready to scrutinise the revenue flow from the National Nigerian Petroleum Company Limited.

In the report, the World Bank raised transparency and accountability issues about the financial gains from fuel subsidy removal remitted by the NNPCL and the impact of subsidy removal on federation revenues.

According to the World Bank, while revenue gains from the exchange rate reforms are visible, more clarity is needed on oil revenues, including the fiscal benefits from the PMS subsidy reforms.

It declared, “Nominal oil revenue gains have been evident since June; these are mostly categorised as ‘exchange rate gains’”, suggesting that they are due to the naira depreciation.

“Except for the exchange rate-related increases, however, there is a lack of transparency regarding oil revenues, especially the financial gains of the NNPC from the subsidy removal, the subsidy arrears that are still being deducted, and the impact of this on federation revenues.

“It is also unclear why retail petrol prices have not changed much since August, despite fluctuations in the exchange rate and global oil prices.”

The institution further expanded that gains in net oil revenue of the federation were lower than what they should have been considering what the removal of fuel subsidy should have added to the accounts.

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