NNPC has flown a petrol price increase kite. They should be told in clear terms that this kite will crash in the hills
Mele Kyari, Group General Manager, Crude Oil Marketing at the state run Nigeria National Petroleum Corporation (NNPC) said this week that the current price of petrol (N145/liter) is no longer sustainable, given Nigeria’s foreign exchange (forex) crisis.
ALSO READ: No plan to increase petrol cost – NNPC
Said Kyari: “We have a very difficult business environment. It is impossible today to import products at the current market price, at current fixed foreign exchange rate. There is no way today you can take products to retailers and sell at N145. It is not possible.
“If that is true and I believe that it is, because we all go to the market, why can’t we sell above N145? That is where legislation should come in. I also know today that it is impossible for this government to announce tomorrow that petrol is about N150.
“This government cannot sustain it. That is the truth. The people will not accept that figure. That is why suppliers are not importing. Today, we are in subsidy regime, absolutely.
“There is no way you bring product today and sell at N145 and get back your money and make profit”.
Within moments of Kyari’s widely publicized comments, another NNPC top management official, invited journalists over for a rebuttal.
According to Group General Manager, Group Public Affairs Division, NNPC, Mr. Garba-Deen Muhammad, Kyari’s comments had been taken out of context.
“Reference of unsustainability of N145 per litre of petrol only relates to possible spike in international market price of petroleum products", said Muhammad.
“This has been mitigated by NNPC’s long-term procurement contract plan that guarantees stable pricing.
“Nigerians should not engage in panic buying, as there is no cause for alarm with respect to pump price increase or shortage of products.
“The PPPRA (Petroleum Products Pricing Regulatory Agency) would definitely sensitise Nigerians on a petrol price increase and give reasons for it.
“As for this moment, there is absolutely no plan to do that and no need for that because we have more than enough supply. In addition to that, we also have long-term procurement contract with our suppliers.
“The statement people are referring to was made within the context of technical explanation, not within the context of downstream operations. A new window to make forex available for marketers for their import needs have been opened and they are satisfied with it.”
It was all too familiar—fly a kite and see if the people will reach for it. When you sense shreds of resistance here and there, return to the boardroom and draw out a plan that says you have been taken out of context.
This was the NNPC testing the waters. It’s a time-worn tactic often deployed by government and its insincere officials.
Kyari was publicly expressing a school of thought that had been discussed extensively in plush, marbled NNPC meeting rooms.
Muhammad had been deployed to clean up the mess Kyari had stirred.
That’s just the way it is with these guys.
Here’s the thing, though: another round of petrol price increase at this time will kill Nigerians.
“Buhari should kuku kill us na”, someone said to this writer last night, while referencing the subject.
With spiraling inflation hitting Nigerians hard in the pockets, commodity prices out of reach of the ordinary Nigerian and an economic recession that has sent businesses under, increasing the price of petrol at this time will be the equivalent of a death knell for many households.
A move of that kind will worsen the nation’s economic woes and prolong the agony most Nigerians are currently going through.
We can discuss a full scale liberalisation of the downstream sector when economic indices improve and when the exchange rate becomes business friendly.
No one—not in NNPC or Aso Rock—should mention another round of petrol price increase at this time when Nigerians barely have their heads above water.
For the medium and long terms, we should fix our refineries and at least refine what we consume. No one will conflate forex shortage and petrol consumption if we were a serious country; one that refines the crude oil it has in abundance.
Those NNPC ‘big men’ who have been contradicting themselves in the media at our expense, should tell whoever sent them that they didn't see us.
Like they say these days, ‘Kolewerk’.