Connect with us


Petrol N617: Price May Go Up Again In 45 Days, Expert Warns Of Bumpy Road Ahead




•‘Why Tinubu dumped gradual subsidy removal’

Peter Esele is a former President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). With his vast knowledge of the oil industry, Esele speaks on the increases in the price of petrol occasioned by subsidy removal.

From about N149 petrol at the time President Bola Tinubu assumed office on May 29, a day he declared that “subsidy is over”, the price of the product has moved to over N500, before jumping to around N617 last week.

What can you tell us about the way the removal of fuel subsidy and petrol price increase is panning out in the country?

What we have is that marketers are making a kill. They don’t buy fuel from the depot every day. So if they still have the old stock and they are selling at the new price, what we are experiencing is that they have decided to maximize profit. In the other states where they sell at the former price, in a deregulated market, the only thing that matters is the morality of the owner of the retail outlet.

So, if the man has the moral that he bought at X price and decided to stick to it until the product is completely exhausted. So, it is strictly a question of morality. There are people who will go out there and say “This is a window, let me make so much money out of this window”.

The other aspect is that the last time we spoke, I told you we were going to pay higher for fuel in July. The reason for this is that the Nigerian National Petroleum Corporation, NNPC, normally does between 60 and 90 days’ stock.

It is expected that the stock they got is different from the previous ones they got which was less than N550 to the dollar.

NNPC can get the dollars at N463 but if I am to look at what the others may get, it is about N550 three months ago, that was where NNPC was. Where is NNPC now? If they are to import, they could get dollars at N463 before the advent of this administration.

So now, if NNPC is importing at about N750, they cannot sell at the former price. These are where the changes would come about. Again, you also know that the international price of crude has also gone up and you have a falling naira.

It is like a double warning. These are our new challenges, new reality; new normal. So, the price of petrol may just be N617 in Abuja, N568 in Lagos, but what we are going to have is that this price may likely maintain itself for another 30 to 45 days, except we have new increases in crude oil prices. That is the challenge we may have to face.

Naira value has of late been falling, meaning that this price will keep going up. Is that correct?
Yes. You are going to have the price going up but the way you put it is frightening. It may not be as frightening as that.

But that’s the reality?

There are two things we need to do. Our excess liquidity is quite low. What we are going to do is for the country to take advantage of the current price increase of crude oil. Unfortunately, we are about 500, 000 to 600, 000 barrels short of our daily production quota as fixed by the Organisation of Petroleum Exporting Countries, OPEC. That in itself is over $60 million daily that we are losing. That’s one of the challenges.

The second one is that we have pressure on FX because there are no local refineries. I was thinking that before this time, we would be getting at least 30% (petrol) from Dangote Refinery before they go full stream but I don’t know what is happening there anymore and I had a meeting with PENGASSAN two weeks ago where we tabled these challenges.

The road ahead is going to be bumpy and tough but government needs to do something that will mitigate these challenges in this honey period before the honey disappears.

The Nigeria Labour Congress, NLC, has always agitated that government must put certain things in place before removing oil subsidy. Do you think those conditions had been met?
No. Those conditions have not been met. It is not just in this tenure because we have a government that is barely two months old and one of the things the NLC has always been saying is “fix our local refineries so we don’t have pressure on FX”.

If you are getting your products, what you are having now is huge pressure on FX and, by September, we are going to have about 20, or a minimum of 10 more companies to help bring in this product. So, we are going to have more pressure on FX. If you don’t have local refineries, and pressure mounts on FX, importers of the product may not get dollars from the Central Bank of Nigeria, CBN, and would have to go to the parallel market so as to remain in business.

And going to the parallel market will further devalue the naira because one thing about economics is not about perception. If everybody is worried as we are, right now, no matter what you do, the perception is that we are sinking. So, what we need to do NLC has talked about. Just imagine that from the government of Obasanjo till date, we are always talking about refineries not working. Former President Buhari promised to build two refineries; this was not done throughout his eight years. What I want everybody to do is to go beyond the salary increase.

Do you really say marketers are making a kill when they are not sure of the price they are going to buy when next they go to the depot?

I didn’t generalize. I said some of the marketers. If you still have a product in-house, why increase the price? If I buy a product at N40 and sell at N50 and, suddenly, where I go to buy it, the price has increased to N60, does that mean that I‘ll start selling at N60? No, because the last time I bought it I bought it at N40 and sold it at N50. So, why don’t I stick to N50? That is why I said that it is an issue of morality. I am not putting them all in one basket because I know that some stick to their price due to their morality while others are taking advantage out of fear of what might happen tomorrow.

Some argue that the fuel subsidy removal could have been done better. What is your take?

Well, they say this could have been done better but when you are outside, there is certain information that you are not aware of until you become the President. So, the President has to look at the finances of the country. Again, irrespective of what the presidential candidates were saying, the three major political parties all agreed that they were going to remove fuel subsidies. The process of doing it was difference.

I was an advocate of gradual subsidy removal but what I learnt from this administration is that, even if you want to take away 25%, how do we know what we are paying? This is the first time I know the actual amount of fuel we consume daily. Right now, we are consuming 46.6 million litres of petrol per day. Before this, it was 70 million litres. So, if they had done 25%, we would never have had these figures and the government would have reduced subsidy for two months and the whole thing would balloon again and we go back to square one.

That was the information I got from the players in this administration on why they had to do what they are doing. Then, on whether this would have been done long ago when you talk about what happened during former President Jonathan’s administration, opposition parties are there to take power. The first thing you have to do is to find out if what you are opposing will give you power. That is what opposition parties are all about. They are interested in how to get power. As citizens, we also have to look at what is in our own best interest.

What is happening across the country now is that those struggling to survive are spending about 70% of their earnings on transportation. Recently, the total amount that was shared as allocations from the Federation Account was about N799 billion. Most people ask how the money is going to be used. It is not the responsibility of the Federal Government to provide buses in states; it is the responsibility of the state government. The Federal Government can say “Contribute 50%”.

That is what is supposed to be done in the federal system of government that we are running. The Federal Government cannot provide buses for any state but can guarantee a manufacturer to produce buses for it to buy and distribute to states.

We are being told that the price of fuel could come up or go down. Could that be a political statement?

No. It is not a political statement. It is going to come down, that’s the law of supply and demand. You also know that crude is a commodity and every commodity has booms and bursts, they are all cyclical. What triggered this was that Saudi Arabia withdrew millions of barrels from the market has also cut production.

Meanwhile, we are not even able to meet our production quota. If we have all that in place and we have enough dollars, that will ease the liquidity squeeze that is currently going on. So, let’s assume we go into winter when crude prices fluctuate. That will definitely come, just as we have it in the stock market. What goes up must surely come down. So, it is not a political statement.

The price will rise due to fundamentals such as the falling naira, and inability to access FX. Presently, there are two windows that are merging. The Federal Government wants to have convergence. Those who get dollars at the parallel market may not even be able to sell at N640.

Those are the factors we must look at but I am optimistic that these prices will go down but government needs to create a way to enable Nigerians to breathe so that when it starts running, they will be alive to enjoy it.

What is the cause of the delay in Dangote entering the market? Is he watching the market? Since he is producing and not importing, is it likely that prices will come down or at least stabilize?
Now, the market is very good for Dangote’s entry but I think Dangote is in the best position to answer that question because, by his own projection, he said July, so let us hope that before the month runs out, we see fuel coming out from Dangote Refinery.

In terms of whether he is watching the market, I think the market is ripe for everybody to come in because, for the past two months, the government has shown that they are not intervening. The government is going to allow market forces to take control. So, I think it is very good for players to come in now.

We understand that Nigeria gets less valuable on the crude we export. What’s your take?

That is true but it has to do with the capacity of our leaders. You see, for the past two months, Nigeria has been making new mistakes and that is good. It’s when you keep repeating old mistakes that you are not growing.

New mistakes are evidence of growth. On the question of gas, Nigeria is actually a gas country. Our gas reserves at the moment are over $3trillion. So, if we allow private investors to come in, it’s going to benefit government and the people. A Nigerian company is currently investing $ 5 billion in gas and once the market is available, it will be easier to for us to move on. The other aspect is refinery.

Our refineries need to work for our national security interest and for us to export and earn dollars. If we are able to get our mix right, I am optimistic that things will improve but government needs to do something in the interim to cushion the effects of the removal.

Do you think Nigerians really understand this deregulation we are talking about and do you think government has explained that well enough?

I think the government has to do more in terms of communicating with the people. When the news of the new fuel price was broken, people were really angry. I spoke with someone in Abuja who said he bought a litre at N500 while another person said he bought his at N615, just 45 minutes after. What government should do is communicate this to Nigerians and let them know that the prices are up. The shock we are experiencing is a new reality that we are in, no change is ever easy, not to talk of this difficult one.

So, in Nigeria, the media are all going to talk to Nigerians, letting them know that they will pay less when prices go down, just as it is in the case of gas. I also hope that marketers will reduce their prices once they go down. The government needs to do more in effective communication. Let people be aware. Again, the government needs to hit the ground running now by looking for intervention measures to carry out. If the government doesn’t do that, the prices of crude are still going to be higher due to the OPEC cut.

•Interview first aired on Channels TV

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


China Reaffirms Commitment To Nigeria, Renovates Ogun School



The Chinese Consul-General, Lagos, Yan Yuqing, has reiterated the commitment of the People’s Republic of China towards assisting Nigerian government to develop its education sector.

The Chinese Consul-General disclosed this during the commissioning of renovated China-Nigeria Friendship Model Primary School, Igbesa in Ado-Odo/Ota Local Government Area of Ogun State.

Yuqing said China is quite convinced that education is the foundation of national development and a weapon to fight poverty.

He said China is always willing to partner with her host country to make meaningful investment in the critical sector

The projects sponsored by the Chinese Consulate and Ogun-Guangdong Free Trade Zone included a block of classrooms, cafeteria, as well as donation of educational materials to the pupils of the school.

Yuqing said, “Chinese admire that education is the foundation of national development in the long run and strong weapon to fight poverty. All modern countries in the world do not fail to attach importance to education. As the largest developing country in the world, China has made remarkable achievements in all aspects of social development.

“These achievements are inseparable from our unswerving implementation of the strategy of invigorating China through science and education. And we always place education in a strategic position of priority development. We will continue to support Nigeria’s education system in all areas”.

She added, “Eleven years ago, the construction of this school began. Since then, this school has become a bridge of friendship and understanding between Nigeria and China and it has witnessed sincere friendship from China.

“Today, you can see here, the classrooms are more spacious, the campus is more beautiful, and the facilities are more complete. I hope that all the children will study harder in these improved classrooms and strive towards achieving their goals as soon as possible”.

While advising the pupils, the Consul-General said, “Children education is related to the future of a country; now you are the future of Nigeria. Work hard and fight for a better tomorrow for the prosperity of Nigeria.”

The Deputy-General, China-Africa Investment, Kevin Liu, said the China-Nigeria Model School stands for knowledge, cultural exchange, and mutual understanding, saying, “These values promote global peace and cooperation and we are committed to maintaining this standard for generations to come”.

Governor Dapo Abiodun, who was represented by a Commissioner-designate,Mr. Sesan Fagbayi, disclosed that the project would no doubt further foster smooth bilateral relationship with the Chinese government.

Abiodun has however appealed to the residents of Igbesa to continue to cooperate with the Chinese investors for peace and friendly environment in order for their businesses to thrive.

The Oloja-Ekun of Igbesaland, Oba Oluwatoyin Akinde, represented by Otunba Ade Durojaiye, lauded the Chinese Consulate and Ogun-Guangdong Free Trade Zone for the project pleading for more support in developing the town.

Continue Reading


Fresh Strike Looms As NLC’s Ultimatum Expires Today



AS the ultimatum by the Nigeria Labour Congress, NLC, to the Federal Government to address the mass suffering and pains occasioned by the removal of subsidy on petrol expires today, the leadership of the Congress will meet next week to decide when to begin an indefinite nationwide strike.

But Vanguard gathered that the Vice President, Senator Kashim Shettima, has been meeting with some members of the government team on how to avert the strike.

It was also gathered that the Minister of Finance, Wale Edun, and the Minister of Labour and Employment, Simon Lalong, alongside the Vice President, are putting together a package, including wage awards, to be presented to the NLC leadership.

It will be recalled that NLC had between Tuesday, September 5 and Wednesday 6 embarked on a two-day nationwide warning strike to protest, among others, perceived government insensitivity to plights and sufferings of Nigerians, especially workers, following the subsidy removal.

Ahead of the warning strike, the National Executive Council, NEC, of NLC had issued within 14 working days or 21 days from September 1, 2023, an ultimatum for the government to address the excruciating mass suffering and the impoverishment experienced around the country, threatening an indefinite strike if government failed to address its demands.

As the 21-day ultimatum expires today, Vanguard learned that critical organs of NLC will be meeting next week to decide on the indefinite strike and modalities if nothing concrete was done to lessen the suffering and hardship of Nigerians.

A source said: “The issue is conventional, when an ultimatum expires, you call your organs and the organs will decide when to commence the strike. If we ever decide to say we would take one day or few days or one week to prepare for it, that would be their position.”

Pressed to be more categorical on whether the strike would commence immediately, one of the sources privy to the NLC meetings simply said “Nothing is impossible.”

‘Meeting to hold on a date for the strike to begin’

Another source told Vanguard that the “last NEC held on September 1, 2023, has actually given the leadership of NLC, especially members of the National Administrative Council, NAC, the go-ahead to meet, fix a date for the commencement of the indefinite strike and communicate to the state councils and industrial union affiliates.

“I can tell you that the leadership will meet next week and fix a date for the strike. However, if NAC members are convinced that the government has addressed our demands to an appreciable level, in such a case, the leadership will still call the organs to brief them of the development.”

‘Govt team working to avert strike’

The source, however, said available information revealed that the government team is working seriously to avert another round of industrial unrest by NLC.

He said further that both the minister of finance, and the vice president, who is standing in for the President who is attending the United Nations General Assembly, UNGA, Summit in New York were considering some figures.

“So they know the seriousness of the planned action and some of them are speaking out boldly that they are not afraid because of the package they have for workers.

“Available information is that the government will soon announce what it has. They are really making efforts and again the President is not in the country.

“What we don’t know is whether what they have will be enough for NLC to consider or not. In the past two to three days, the vice president has been meeting with some of the government team to come up with something. “

The source made it clear that the NLC leadership had said it would not be part of any meeting if there were no tangible packages for workers.

Attempt to get a reaction from the Presidency did not yield any results as the Special Adviser to the President on Media and Publicity, Chief Ajuri Ngelale, is out of the country.

The presidential spokesman is with the President in New York for the UNGA summit.

Recall that while briefing last Friday, after its NEC’s meeting, NLC President, Joe Ajaero, said: “NEC-in-session of NLC resolved to embark on a total and indefinite shutdown of the nation within 14 working days or 21 days from today until steps are taken by the government to address the excruciating mass suffering and the impoverishment experienced around the country.

“To commence a two-day warning strike on Tuesday and Wednesday, 5th and 6th September 2023 to demonstrate our readiness for the indefinite strike later in the month and to also demand that the state vacates the illegally occupied national headquarters of the National Union of Road Transport Workers. “

The NLC also resolved to embark on a mass protest and rally in Imo State within September, and equally raised the alarm over what it described as a renewed onslaught by the government and its agents on labour unions.

Ajaero explained that the proposed strike was necessitated by the government’s deliberate neglect and disregard to engage the relevant stakeholders through the channel of social dialogue.

He said the Federal Government had refused to engage and reach an agreement with organized labour on critical issues on the consequences of the unfortunate hike in prices of petrol which had unleashed massive suffering on Nigerian workers and masses.

Ajaero said: “There is a renewed onslaught against trade unions and its leadership by the state and its agents across Nigeria.

‘’The Police, under the instruction of certain forces peddling the name of the President of the Federal Republic of Nigeria, invaded and occupied illegally the national headquarters of the National Union of Road Transport Workers headquarters seeking to install its own executive.”


Continue Reading


Kogi Declares Free Education In Primary, Secondary Schools; Commences Distribution Of Palliative



The Kogi government on Thursday declared free education for indigenes at primary and secondary school levels.

Governor Yahaya Bello made the declaration in Lokoja when he inaugurated the distribution of the federal government’s palliatives to cushion the effects of subsidy removal.

“My administration has now declared free education from primary to secondary school in the state and will cover examination fees for WAEC, NECO, and JAMB for all indigenes of Kogi,” he declared.

Mr Bello, who commended the federal government’s efforts to mitigate the impact of fuel subsidy removal on citizens, said the palliatives, which were valued well in excess of N2 billion,  would reach intended beneficiaries regardless of political, religious, or ethnic affiliations.

He extended his gratitude to President Bola Tinubu for the idea.

“Already, all the local government areas of the state have commenced the distribution of rice and other essential items.

“Therefore, this launch is essentially an extension of our ongoing efforts to cushion the impact of the current policy on our citizens.

“We are not only distributing rice but also making cash available to reach the people. The total value of what we are launching for distribution today exceeds N2 billion, and it is intended to reach every household in Kogi,” he stated.

He emphasised that those responsible for the distribution must not discriminate, warning that any report of bias or favoritism, or hoarding would be dealt with accordingly.

The governor, who called on security agencies to ensure a peaceful and smooth distribution process, assured the people that more initiatives to alleviate hardship were in place.

He commended the state’s people for their support for Mr Tinubu’s administration and the New Direction administration in Kogi, which had prioritised the welfare of residents.

While mentioning the various infrastructure developments that had taken place across the state, Mr Bello expressed confidence that the governorship candidate of the APC, Usman Ododo, when elected as his successor, would continue to build on the current achievements. 


Continue Reading


Copyright © Estreet On TV 2023