By Chukwudi Nweje / Acting Features Editor
The Federal Government has finally heeded to the cries of Nigerians for a reduction in the pump price of petroleum products consumed by the citizenry. The government on Sunday announced a N10 slash off the pump price of Petroleum Motor Spirit (PMS) from N97.00 to N87.00 per litre.
Minister of Petroleum Resources Mrs Diezani Alison-Madueke who announced the price cut has also directed the Petroleum Products Pricing Regulatory Agency (PPPRA) to ensure that marketers immediately adjust to the new price regime. According to her, the price cut became necessary following the dwindling crude oil price.
She said: “As you may be aware there has been a lot of volatility in price of petroleum product particularly crude oil over the last few months, invariably this has meant that the price of the product in Nigeria has also been greatly impacted.
“It is as a result of this under the approval and directive of Mr. President and in line with Section 6 Clause 1 of the Petroleum Act, that it is my responsibility as the Minister of Petroleum to announce that there will be a reduction in the pump price of petroleum (primium motor spirit) by N10, therefore the reduction will be from N97 per litre to N87 per litre effective as of mid-night Sunday the 18th of January 2015.
“In line with this I have directed the Petroleum Product Pricing Regulatory Agency and the Directorate of Petroleum Resources to ensure there is strict adherence to this new pricing regime as soon as it takes effect from midnight Sunday 18th of January 2015. I do hope the entire country will benefit immensely from this reduction in the pump price of petroleum.”
Welcoming as the reduction in the price of PMS may appear to the average Nigerian, some analysts have described the percentage reduction as “too little” and “most likely political”. Some Nigerians believe that Sunday’s reduction of the pump price of fuel is laced with politics given that since the global fall in the price of crude oil began, Nigerians had agitated for a price reduction to no avail. Many had in fact argued that the domestic pump prices of petroleum products needed to be adjusted to reflect the falling price on the international market. The general consensus among civil society organisations and labour unions was that retaining the prices of petroleum products at their rate was tantamount to stealing from the citizenry.
Since the falling oil prices began, many other countries, oil producing and non-oil producing countries alike had cut down their petroleum products’ prices. India for example is reported to have cut PSM price about seven times since August last year to reflect the contemporary international price of crude oil. As a matter of fact, Gen. Muhammadu Buhari, All Progressives Congress (APC) Presidential candidate regretted that the collapse of crude oil price since October 2014 has not translated into any change in diesel, kerosene and PMS prices across the country. He argued that “Nigerians are being short-changed by about N50 to N70 on every litre of diesel sold by government.”
Alison-Madueke argued that the government has “been watching very carefully for the last two weeks to ensure that the volatility did not destabilise this particular reduction in price and we think it is safe to implement it at this time.”
Some analysts however expressed disappointment. For instance, Olanrewaju Suraju, Chairman, Civil Society Network Against Corruption (CSNAC) wondered why the pump price cut was restricted to PMS He said: “It is obvious we got a political reduction. The international market price has fallen by over 50 per cent and we have just 10 Per cent reduction? It also affects only PMS out of three by products of crude oil. The people deserve better information. Are we having subsidy at this huge price fall etc? This is election targeted reduction.”
Another analyst, Jude Fejokwu, observed that “diesel prices in Nigeria are still in the prices they have been six months ago (within a 5% margin despite oil prices having fallen about 60% since June 2014.” He said” what is the hope of deregulation of gasoline in Nigeria when deregulation is synonymous with stagnancy? Gasoline prices change daily in across the United states as oil prices fluctuate.
“if oil prices rise to $150 per barrels today, you can be rest assured that downstream oil marketers will adjust their diesel prices immediately in Nigeria. What is the hope of the common man in Africa’s most populous country and largest economy with everybody at the top looking upward and nobody looking downwards where it really matters?
Debo Adeniran, Executive Chairman, Coalition Against Corrupt Leaders (CACOL) said the reduction is not proportional to the reduction in the prices of crude in the international market even as it is coming far behind expectation.
He said: “When the prices of petroleum products were hiked, they told us it was because the price of crude had gone up in the international market and they had to subsidise, but now the price has gone down more than 70 per cent, we expect the N97 petrol price and the prices of other petroleum product should have gone down about 70 per cent too.
“The reduction is coming far behind the time we expected and it makes the whole thing looks like a political gimmick, a kind of action engineered by political expediency. It doesn’t really matter, what we demand of our political rulers is that Nigerians should not be taken for a ride because the amount of difference between the time they ought to have reduced the prices of petroleum products and now is so enormous.”