Slyva: Why another hike in price of petrol is inevitable

Slyva: Why another hike in price of petrol is inevitable

Wednesday, February 10, 2021 2:22 pm

Minister of State for Petroleum Resources, Mr Timipre Sylva,

Ayorinde Oluokun/Abuja

The Minister of State for Petroleum Resources, Mr. Timipre Sylva has asked Nigerians to ready to endure the pain of another hike in the price of premium motor spirit, popularly called petrol, even as the country is also set to benefit from the rise in price of crude oil in the international market.

According to the Minister, with the price of crude oil now around $60 per barrel yesterday, it is inevitable that the cost of mostly imported refined products will also rise.

But the Trade Union Congress has warned that while organised labour is trying seriously to avert a major industrial crisis over the frequent increases in price of petrol, it is running out of patience with government.

Slyva who spoke at during the official inauguration of the Nigerian Upstream Cost Optimisation Programme (NUCOP) on Tuesday said the Nigerian National Petroleum Corporation (NNPC) cannot continue to bear the cost of under-recovery or subsidy. According to him, government is not ready to fritter away the additional revenue it is earning as a result rise in crude oil price on subsidy payment.

The pricing template of the Petroleum Products Pricing Regulatory Agency (PPPRA) had indicated that while the landing cost of petrol now is over N179 per litre, the expected Open Market Price (OMP) is about N202 per litre.

But the product is still being sold for between the N162 and N165 per litre price band. This cannot continue, Slyva said at the occasion: “Since we are optimising everything, NNPC needs to also think about the optimisation of product cost because as we all know, oil prices are where they are today, $60.

“As desirable as this is, this has serious consequences as well on product prices. So, we want to take the pleasure and we should as a country be ready to take the pain. Today the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy.

“So, somewhere down the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it. As a country, let us take the benefits of the higher crude oil prices and I hope we will also be ready to take a little pain on the side of higher product prices.”

Speaking in the same vein, the Group Managing Director of the NNPC, Mr Mele Kyari told journalists at the occasion that the rise in the price of crude oil has impacted the price of finished petroleum products globally, including Nigeria.

But he said government was discussing with the organized labour to ensure there is no exploitation of ordinary Nigerians by the vagaries of the market.

“I am sure you must have seen a number of newspaper conversations around the price of petroleum; I am sure we are all happy here that crude oil has hit the $60 mark by yesterday (Monday) and probably growing but certainly not going beyond this voodoo game.

“We don’t see it crossing the $65 per barrel mark. We said $60 now we have reached it and we are getting to $65 but it comes with its consequences.

“One of it is that it has impact on the price of finished petroleum products anywhere in the world, including our country. This is a tough challenge we are dealing with to be able to make sure that we are able to get this country wet; despite all the challenges we have the clear directive of government to deregulate the downstream sector.

But the Trade Union Congress (TUC) has described the move to increase price of petrol as another indication that the Buhari administration has no mercy for the poor in a statement titled ‘Why are you always quick to tell us about rise in crude price?’ released on Tuesday.

The statement, which was signed by Comrade Quadri Olaleye, President of TUC, said: “The Trade Union Congress of Nigeria (TUC) has expressed shock over the recent statement credited to the Ministry of Petroleum on the recent rise in the price of crude in the international market.

“The question is why is government always quick to tell us about the rise in the price of crude in the international market and the need to increase the price of PMS but it takes them weeks and sometimes months to implement agreement reached with the Organised Labour? It all points to one thing: they have no mercy for the poor people of this country.

“In every move and statement by government officials you could see and feel their care-free attitude and indifference to our plight.

“It appears they are not disturbed by the poverty -ridden plight of Nigerians and the unemployment/insecurity situation that their obnoxious policies have created in the country. There is nothing honorable about what the Minister has said.

“Nigeria is among the six oil producing countries in the world. Reports have it that our oil is one of the best, giving us an edge over others.

“Unfortunately we have not taken advantage of that. We have four refineries that are not functional. Why are they not functional and why is government closing its eyes to it?

“Their refusal to attend to them is reason why the country is subjected to the vagaries and volatility of the price of crude in the international market.

“Nigeria is now depending on Dangote and Niger Republic refineries to supply us fuel! Dangote is an individual while Niger Republic is far less than Lagos in population. The pain the masses of the country bear is a needless one. It is artificially created.

“The TUC, nay organised labour is trying seriously to avert a major industrial crisis. We have tightened our belt so hard to the extent that we are finding it difficult to breathe but the government seems not to care. Government’s knee is on our neck and we are appealing to them to have a change of heart.”

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