New fuel pump price, mere tokenism – APC

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 97 to 87 Naira) is a mere tokenism at
a time the price of crude oil has crashed by about 60 per cent.
In a statement, Monday, in Lagos by its National Publicity Secretary, Alhaji Lai
Mohammed, the party said the pump price of a litre of fuel should not be more
than 70 Naira, meaning that at 87 Naira per litre, the government is forcing
Nigerians to subsidize the massive corruption in the oil sector by 17 Naira for
every litre of fuel.
”When crude oil was selling at 100 dollars per barrel, the landing cost of PMS
without subsidy was 125 Naira per litre. Now that the oil price has crash to
about 44 dollars per barrel, landing cost without subsidy is about 65 Naira per
litre. The same goes for diesel which should not sell for more than 90 Naira 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 Jan. 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.