Fuel Price Hike: FENRAD faults FG over lack of clear-cut deregulation framework

Posted by News Express | 19 November 2020 | 739 times

Gmail icon


A human rights, democracy, not-for-profit and pro-people group, the Foundation for Environmental Rights Advocacy and Development (FENRAD) has condemned the recent increase in pump price of petrol by the government.

The group also bemoaned what it called the lack of clear-cut regulatory framework of the Muhammadu Buhari-led federal government in the oil industry.

In a press statement signed by Comrade Nelson Nnanna Nwafor, its Executive Director, the group said under the current administration, the government has removed subsidy and adopted in its place what it termed “under-recovery payment”, adding: “The only distinguishable feature under the said programme since it was flagged off during the APC-led government’s first tenure is that the Nigeria National Petroleum Corporation (NNPC) became the be-all and end-all of marketing of the product through its subsidiary – Petroleum Products Marketing Company (PPMC) – selling directly to the marketers, Independent Petroleum Marketers Association of Nigeria (IPMAN) members, mostly,” in which case nothing has changed except policy nomenclature.

According to the statement, “The President who is both the Commander-in-Chief of the armed forces and substantive Minister of Petroleum has not shown the capacity to address the petroleum industry challenges on which crest he rode to power in 2015.

“The current deregulation under Buahri has not only failed to enthrone a price-modulated regime where market forces determine cost but has continually used government forces (NNPC and PPMC) to determine, peg and work out price template.

“Government forces and not market forces still call the price. Otherwise how does one explain away the chequered price fluctuations since June 2020 from N121 (in June) to N148-N151 in around August and now N171 in November with the retail price of over N200 in some parts of the country? Was the subsidy removal now termed deregulation phased to suffer Nigerians on quarterly or monthly basis?, it asked, adding, "Government is yet to show itself as being precise, policy wise.”

FENRAD further said: “The condemnation comes as FENRAD, after critical assessment of the deregulation programme of the petroleum subsector going on under the federal government so far, observes government's insincerity in dealing with its citizens towards achieving equitable price regime. This is totally undemocratic, largely.

“It is sad that the NNPC, through its subsidiary, PPMC, could slap such a mean policy on the citizens of our country in a time like this. FENRAD recalls that during the lockdown the said product sold at N121 or thereabouts but has since the end of the lockdown in June undergone various upward price reviews even when the purchasing power and consumption capacity of the average Nigerian faces a sharp decline.

“FENRAD learns the hike in price is connected with the desire to create a Midstream Sector Regulatory Authority to replace both Petroleum Equalization Fund Board (PEFB) and Petroleum Products Price Regulatory Agency (PPPRA) in managing the strategic stock of the product as is contained in the petroleum industry bill (PIB) yet to be implemented into law.

“The equalization fund, if well managed, can fix our refineries running below optimal capacity. Billions are (mi)spent in the name of equalization by the board yet Nigeria still imports her own God-given resource. FENRAD wonders if the PIB, which has for long suffered staggered implementation is being implemented in phases to drag the suffering of Nigerian poor.”

The group also condemned the activities of certain marketers and owners of filling stations who indulge in profiteering due to fragility in the Nigerian petroleum sector. For example, it observed, while in certain regions of the country the product sells at N170, in the Southeast, it sells at over N200.00. This, FENRAD said, is largely due to market behaviour and panic buying increase in price which creates even artificial scarcity too. This represents man's inhumanity to man. FENRAD equally draws the attention of concerned agencies - PPPRA and others to this.

“The instabilities and inconsistencies with which the petroleum industry is fraught are all open for all to see. Before now, it was Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) strike over Integrated Personnel Payment Information Service (IPPIS) of the federal government a situation that led to artificial hoarding, scarcity and increase in fuel price only a couple of days back.

“Today, it is another story. Why can’t the federal government harmonise the petroleum industry and sector with a view to allowing poor Nigerians access, use and consume this single product nature and God has endowed us with?

“The sufferer of these inconsistencies is the common masses - the trodden grass in the fight of the elephants or bulls - whose businesses have gone under in most cases. Many in the informal sector or microeconomic sphere of the economy depend on fuel to preserve their products or maintain steady output given the epileptic power supply inherent in our polity and economy.

“The implication is that sellers of certain commodities may not be able to transport their goods to area of need (market) as fuel affects cost of transportation.  When these locals do finally transport their wares, they may not find market as price may vary under the existing condition. This is how businesses and consumption decline because of one single policy.

“It makes no economic sense that Nigerians are made to go through all these at a time they have suffered so much already as occasioned by the pandemic, its attendant lockdown; the EndSARS protests and its attendant curfew in one excruciating year of 2020 alone.

“Government really needs to look inwards to drive revenue. It is true that primitive and reckless consumption since independence has taken a toll on the ability of the federal government to harmonise revenue and national resources but the government must know that with policies like this fuel price hike small and medium enterprises can hardly stay afloat or in business.

“The hardship is much already, the government must protect small businesses and local industries. Government must go back to the drawing board and see how best it can fix the moribund refineries; even if it means concessioning them under a well regulated and efficiently managed programme. Citizens must not bleed to death before Canaan is reached,” the group advised.

Source: News Express

Readers Comments

0 comment(s)

No comments yet. Be the first to post comment.

You may also like...