Speculation has been rife that another regime of petrol price increase lurks in the horizon. We've been here before
It looks like an old playbook that has been dusted and is now being implemented by regulators, conspiracy theorists say.
Two Nigeria National Petroleum Corporation (NNPC) top officials were deployed to test the waters recently, public commentators have suggested.
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Mele Kyari, who is the Group General Manager, Crude Oil Marketing at the NNPC was first to go on the record to say the present price of petrol at N145/liter was no longer sustainable given Nigeria’s Forex (Foreign Exchange) crisis.
“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,” Kyari said.
Within moments of Kyari’s controversial comments, Mr. Garba-Deen Muhammad, who is the Group General Manager, Group Public Affairs Division of the NNPC, was deployed to do some damage control.
According to Muhammad, Kyari’s comments had been taken out of context.
“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.
“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.”
Except that soon after Muhammad’s comments of 'reassurance', NNPC filling stations across the country increased the price of petrol at their pumps from N143 to N145 per liter.
NNPC gas stations were the only ones dispensing the product at N141 and then N143 per liter. This price regime was touted as one of the gains of deregulation in the early days.
But with that now history, is the government serving the citizenry a fresh notice of what is to come?
Minister of State for Petroleum, Emmanuel Kachikwu, was initially evasive about a petrol pump price increase in a chat with journalists last weekend.
“First, I am not aware that the NNPC has increased price. I need to look into that. It is a bit of surprise for me, because there are processes in doing this, if they have done that, it means they are doing it wrongly.
“Let me find out what the facts are,” Kachikwu said.
Kachikwu thereafter gave plenty hint that the price of petrol will be increased:
“Having said that, the reality is that what we did at the point where we did some liberalisation, was to enable the free market float the price.
“Obviously, as you look at foreign exchange differentiations and all that, it would impact. The worst thing you could do is to go back to an era where we basically were fixing prices".
Interpretation: If the price of petrol goes up at any gas station around where you live or work, the government will say it’s liberalisation or market forces at work.
Everything points to an increase in price of petrol at this point.
Pulse put calls across through to Kachikwu for a definitive government position on the subject of another round of petrol price increase, but those calls went unanswered.
Pulse also sent text messages across to Kachikwu, but there hadn’t been replied at the time of filing this story.
However, in a press statement sent to Pulse, NNPC dismissed rumours of a possible hike in the price of petrol.
“NNPC also wishes to confirm the availability of over 1.6 billion litres of PMS in-country that would last 45 days consumption.
“NNPC is not empowered statutorily to tinker with the pricing template of petroleum products as erroneously reported in some dailies”.
On why NNPC gas stations increased their pump prices, the state-run oil company put it down to good, old, market forces.
“The price adjustment in NNPC downstream facilities from N141-N145/ltr is still within the price band of N135-N145/ltr approved by the PPPRA.
“NNPC assures marketers and motorists of its readiness to continue to be the supplier of last resort and ensuring energy security for Nigeria. There was no NNPC management that met the President to push for a hike in the pump price of petrol to N150 per litre”, the statement read.
In a related development, the Nigeria Labour Congress (NLC) has threatened a shut down of the economy if the pump price of petrol is tinkered with.
Labour and Government have been down this road several times in the past.