Petrol should never cost more than N70 per litre, says APC

The All Progressives Congress (APC) has described as mere tokenism the reduction of petrol price from N97 to N87 per litre, saying the petroleum product ordinarily should sell for N70.

On Sunday, the federal government announced the reduction of petrol price, citing the fall of global crude oil price.

But the APC through Lai Mohammed, its spokesman, on Monday accused the government of making a show out of deceit, saying “a 10.3 per cent slash in the price of petrol was a mere tokenism at a time the price of crude oil has crashed by about 60 per cent”.

It argued that the pump price of a litre of petrol should not be more than 70 Naira, alleging that at N87 per litre, the government was forcing Nigerians to subsidise the massive corruption in the oil sector by N17 for every litre of fuel.

“When crude oil was selling at 100 dollars per barrel, the landing cost of PMS without subsidy was 125 Naira per litre. Now that the oil price has crash to about 44 dollars per barrel, landing cost without subsidy is about 65 Naira per litre. The same goes for diesel which should not sell for more than 90 Naira per litre,” the APC said.

“While governments of countries which are not as economically endowed as Nigeria have reduced the pump price of fuel as far back as early January 2015, Nigeria that is the world’s sixth largest producer of oil is just announcing a price slash that is far below those countries.

“Early this year, Zambia slashed the price of petrol by 23 per cent while Tanzania reduced the pump price of the product by 16%. In the US, which until recently was importing crude oil from Nigeria, the price of fuel has fallen for 113 consecutive days as of January 16. Therefore, the 10.3% price slash in Nigeria is too meagre too late.”

The party observed that the real reasons the Nigerian government had delayed slashing the price of imported petroleum products following the crash in crude oil prices were the corruption in the oil sector and lack of political will.

“With Nigeria depending on importation of petroleum products to meet about 90% of its domestic consumption, the country is relying heavily on term contracts entered into with petroleum product trading companies to meet its domestic demand. It is possible that the petroleum products pricing formulas embedded in these contracts, which generally run for up to 1-1/2 and in some cases 2 years, have not anticipated these low prices,” it said.

“Therefore, unless the government moves to renegotiate the contracts now, it may not reap the full benefits of the decline in petroleum prices. But here is the catch: Since the government and its agents have skimmed off huge ‘commissions’ from the firms with which the term contracts were signed, it could not possibly go back and renegotiate those contracts or go into new forward contracts that will reflect the current reduction in crude oil prices.”It takes a strong willed, determined and transparent leadership to immediately call in the petroleum products contracts for re-negotiation, as this will represent a huge blow on corruption in the sector since clearly ‘commissions’ would have been paid by petroleum product traders on the existing contracts. This explains the token reduction in fuel price, which the government must have hoped will fool an unsuspecting public, especially a few weeks to elections.”

It also wondered why the government had to wait for a widely-publicised call from Muhammadu Buhari, and some other concerned Nigerians before doing what the government of other countries in Africa and elsewhere around the world had already done.

The APC further called on the government to immediately slash the price of petrol to N70 per litre and the prices of diesel and kerosene to N90 per litre each.