His
full press statement below...
During
the campaign last year, the candidate of the All Progressives Congress, General
Muhammadu Buhari pledged that if elected as President by the Nigerian people
his administration would not remove fuel subsidy. Since he won the election
last year President Buhari has consistently resisted pressures from the neo-liberal
characters in the government to remove fuel subsidy and increase the price of
petrol. On January 18, 2016 the federal government allayed the fear of
Nigerians when the price of petrol was reduced to N86.50k per litre. In
justifying the decision to the people the federal government claimed that the
reduction was due to an implementation of the revised component of the
Petroleum Products Pricing Template for PMS and household kerosene.
It
would be recalled that following the popular agitation against the removal of
fuel subsidy in 2012, the Ministry of Petroleum Resources had announced the
decision of the Goodluck Jonathan administration to set up 30 green field
refineries in the country.
Shortly
thereafter, the policy was jettisoned due to pressure from the cabal of local
fuel importers. In 2013, the Jonathan administration secured a loan of $1.6
billion for the maintenance of the country’s four refineries. At the end of the
repairs the refineries could only refine about 80,000 barrels of crude oil per
day instead of 445,000 barrels earmarked for domestic consumption.
The
Buhari administration has also spent millions of dollars for the so called turn
around maintenance of the refineries. Barely a month ago, Dr. Kachikwu had
announced that fuel subsidy had been removed through his ingenuity. In
celebrating the “success” recorded by him in the management of the petroleum
industry he disclosed that Nigeria was saving $1 billion in subsidy removal and
$1 billion in fuel importation. He also stated that “for the first time, our
refineries are ready to work now. Crude has been pumped from Brass to Port
Harcourt.
Pipeline
is being used for the first time in 10 years for the first time in six years.
For the first time we are able to pump to Ilorin, we have not done that in 10
years.” (Nigerian Tribune, March 16, 2016). Curiously, Dr. Kachikwu’s “giant
strides” in the petroleum industry appear to have collapsed completely before
our very eyes!
Hence,
without any public debate or consultation with relevant stakeholders whatsoever
the federal government took the Nigerian people by surprise yesterday when it
decided to increase the pump price of petrol from N86.50k to N145 per litre.
Not too long ago, the federal government had supported the imposition of higher
tariffs paid on epileptic supply of electricity by consumers.
In
sentencing the Nigerian people to excruciating economic agony the Ministry of
Power defied a court order which had restrained the government from giving
effect to the proposed electricity tariff. In the same vein, the decision to
increase the price of petrol is also illegal and contemptuous. In the case of
Bamidele Aturu versus Attorney-General of the Federation (unreported suit No.
FHC/ABJ/CS/591/2009) the Federal High Court declared illegal and
unconstitutional the policy decision of the federal government to deregulate
the downstream sector of the petroleum industry contrary to the combined effect
of the provisions of the Price Control Act and the Petroleum Act.
In
total defiance of the said order of the federal high court the federal
government has deregulated the downstream sector of the petroleum industry. In
justifying the illegal policy, Dr. Kachikwu claimed that “PPPRA has informed me
that it will be announcing a new price band effective today, 11th May, 2016 and
that the new price for PMS will not be above N145 per litre.”
Since
the Petroleum Products Pricing Regulatory Agency (PPPRA) which is statutorily
empowered to recommend the price of petroleum products has not been
reconstituted the unilateral decision of the Executive Secretary of the body to
fix the pump price at N145 per litre is ultra vires and illegal in every
material particular. In view of the illegality, insensitivity and immorality of
the price increase the federal government should cancel it, revert to the
status quo and consult widely with all relevant stakeholders in the society.
However,
due to the ongoing fuel crisis in the country the Directorate of Petroleum
Resources (DPR) recently invited fresh bids for the setting up modular
refineries. At the end of the screening exercise sometime in March this year
the DPR announced that it had awarded 22 licences for modular refineries with
combined capacities to refine 1.429 million barrels of crude oil per day. If
the policy is genuinely pursued the construction of the refineries ought to be
completed within the 9-12 months. If such refineries are established in the
country the importation of fuel and the fraud associated with it will stop. In
the interim, instead of importing oil from Europe and the United States the
NNPC should refine crude oil for domestic consumption in neighbouring countries
which have functional refineries. After all, Nigeria refines 60,000 barrels of
crude oil per day in Cote d’ivoire which is not an oil producing nation.
If
subsidy had been removed over a month ago and the country has been saving $2
billion (from fuel importation and subsidy removal) while the refineries are
now working at full capacity Dr. Kachikwu should tell Nigerians the
justification for the new removal of fuel subsidy announced by him yesterday.
The cost elements that make up the N145 are provocative. If the total landing
cost of a litre and other charges are fixed at N138 what is the basis of fixing
the price at N145? For goodness sake, why should motorists be made to pay
NPA/NIMASA charges, demurrage within and without /storage/ bridging charges
etc?
At
this stage President Buhari ought to prevent neo-liberal ideologues from
hijacking the administration for the purpose of punishing the Nigerian people
for the looting of the treasury and mismanagement of the national economy.
Contrary to the position of the parasitic ruling class that prices of goods and
services be fixed by market forces the federal government has a legal
obligation to protect the people from exploitation. For instance, the virtual
collapse of electricity supply has forced many corporate bodies and individuals
to invest heavily in generators and diesel throughout the country. Although the
price of diesel has crashed all over the world it has continued to increase in
Nigeria due to manipulation. The federal government should, as a matter of
urgency, abolish the monopoly in the importation and sale of diesel. There is
no justification for the monopolistic control of goods and services under a
free market economy!
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