In what could be described as a disturbing news emerging from the Petroleum Products Pricing Regulatory Agency’ (PPPRA) price template for March, 2021, the price of the Premium Motor Spirit (PMS), generally known as petrol is projected at N212.11 per litre. While this is understood as a routine price projection by the agency, the panic among ordinary Nigerians seems to be spreading already.
The implication of the current announcement is the return of the subsidy regime which the government claimed it is no longer funding; and should the current landing price not implemented; the government will bore N48.11 for each litre of the product sold at the current pump price of N164.
In essence, deregulation and removal of petroleum subsidy which the government introduced means that local price of petroleum product will solely be determined by the international crude price, hence, the current crude oil price at 65.51 USD, all things being equal, should indeed lead to the increase in local pump price as announced by the PPPRA.
However, it is important that we equally interrogate and continue conversation around the cost of importing petroleum products into the country, the activities of middlemen (marketers) and other forces vis-à-vis what the agency labels as “landing cost”. It is indeed not acceptable that Nigeria over the years still export crude petroleum products in return for refined oil; which ultimately gave rise to the avalanche of middlemen that we have in the sector at a huge cost to the nation.
In a nutshell, we are of the opinion that crude oil sale at 65.51 USD at the international market is not necessarily the reason why local petrol product is projected for N212.11 per litre, but the failure of different governments over the years to revamp our refineries and encourage local production, as well as the already weakened Naira in the foreign exchange market.
The current economic situation in the country is dire for many families. At the current double digits inflation rate estimated at 16.47% in February, 2021, it will be insensitive for the government to add to the pile of economic burdens on Nigeria. Just over the last week, Nigerians were hardly hit by the panic that spread on the purported increase of pump price which the NNPC dispelled in a statement released by its Group Public Affairs Division.
It is our opinion therefore that any attempt to heap more hardship on Nigerians should be discarded, especially because, fuel pump increase has a trickling effect on other essential sectors of the economy.
SING Nigeria calls on government to explore more avenues that will encourage local production of petroleum products, while in all honesty, properly check illicit activities of middlemen that may lead to increase in landing price of the products.
PRO, SING Nigeria