Based on the average prices for the month of December, 2011, the exchange rate and other indices used to determine the price of petrol by the Petroleum Products Pricing Regulatory Agency (PPPRA),? Nigerians will have to pay as much as N140 per litre for petrol when the subsidy on the commodity is removed. It is what the PPPRA recommends as the open market price, as against the current price of N65 per litre. The PPPRA stated this on its website.
This is coming just as the National Assembly is considering making provisions for fuel subsidy in the 2012 budget.
But some financial analysts have questioned the capacity of the PPPRA to independently determine how much it will actually cost the country to subsidise petroleum products for the year 2012.
The development also came just as members and ex-members of the House of Representatives, under the auspices of the Faculty of Initiatives, have called on President Goodluck Jonathan to exercise caution in his plan to withdraw subsidy on petroleum products or face a possible revolt from the people.
The group’s warning is contained in a communiqué issued at the weekend after its 10th roundable on deregulation.
Incidentally, the pricing template for imported Premium Motor Spirit (Petrol) on the PPPRA website as at December 15, 2011 puts the expected open market price (OMP) of a litre at N140.25.
But a source at the PPPRA told LEADERSHIP SUNDAY that petrol in Nigeria was a political product and the price at which it would be sold to Nigerians when and if the fuel subsidy was totally or partially removed would be a political decision.
He, however, said that if the subsidy was totally removed, the price of petroleum products would likely fluctuate and would be determined by international market forces, like the international price for PMS and freight which could not be determined in Nigeria.
PPPRA products pricing template (daily & monthly) is a pricing information sheet detailing the components used in deriving the PPPRA daily/monthly guiding products prices. It employs Import Parity Principle and this includes landing cost of products, margins for the marketers, dealers, and transporters, jetty-depot through-put, other charges and taxes.
The spokesman of the Senate, Senator Enyinnaya Abaribe of the ruling Peoples Democratic Party (PDP) from Abia State, told LEADERSHIP SUNDAY yesterday that the lawmakers were the representatives of the people and, as soon as they start deliberation on the 2012 budget, the opinion of all Nigerians would be put into consideration.
Abaribe said: “The lawmakers are going home for Christmas and they will consult with their people on the issue. When they come back, they will act based on the outcome of their consultations.”
But the executive chairman of the Society of Analytical Economics Nigeria, Dr Godwin Owoh, has said the National Assembly has to engage high level technocrats, invite memoranda from the public and open up the debate on the way forward.
He said, “I think the economics of the subsidy removal is perfectly correct and for it to remain in the budget is uneconomical, but things are being made difficult for the government by the marketers. The question is, how can we stop the excessive profit of the importers?”
Meanwhile, the Faculty of Initiatives document obtained by LEADERSHIP SUNDAY has warned that the issue of deregulation, if not properly handled, may cause a revolution.
The Faculty, led by Hon. Eseme Eyiboh (PDP Akwa Ibom), said: “The government should embark on massive sensitisation programme to gain the confidence of the citizens and avoid any backlash that would be similar to or replicate the ‘Arab Spring’ experience.”
The group lampooned? government for not being? clear on what Nigerians stand to benefit from the removal of subsidy.
It further said, “The issue of subsidy is a very sensitive one, which has deep and overriding implication for the welfare of the majority of Nigerians, and so must be looked at dispassionately and its merits and demerits properly considered, rather than the on-going play to the gallery”.
According to the group: “The government should encourage and put in place mechanisms for continuous public discourse on the deregulation processes with a view to ensuring adequate public information and enlightenment as a way of eliciting public confidence and trust.
“Government should, as a matter of urgency, begin the transformation and restructuring of the NNPC, to make its operations more transparent and responsive to the yearnings of Nigerians.
The group also advised that “the government should also consider extending subsidies to the productive sectors of the economy and that the National Assembly should enact laws to guide the processes of deregulation and to ensure that their oversight legislative functions are duly carried out”.
To address the skepticism that has trailed the government policy, the forum told the government to make sure that “the whole process of deregulation should be open to competitiveness, transparency and in compliance with international best practices, and savings from oil revenues should be properly monitored and disbursed under adequate supervisory mechanisms to ensure that funds earmarked for specific projects are actually expended on those projects”.
Meanwhile, The Nigeria Labour Congress (NLC) has raised the alarm that the federal government is not disposed to dialogue with stakeholders on the proposed removal of subsidy on petroleum products.
But Labour warned President Goodluck Jonathan to be cautious in his approach in order not to take decisions that would replicate the type of mass unrest that is going on in Egypt.
Speaking exclusively to LEADERSHIP SUNDAY, the NLC acting secretary-General, Comrade Owei Lakemfa, warned the president against using security apparatus against the people who are fighting for their rights
He recalled that past leaders who attempted muzzling popular uprisings failed and had to vacate office.
Lakemfa said: “The problem is that it is the government that doesn’t believe in dialogue. The NLC is open to dialogue anytime they call us. In fact, it is the same government that will say that it is ready for dialogue. And once an agreement is reached, the government will renege on its part, because that has been our experience with the government on the 2011 minimum wage and many other issues. So our position is clear on the fuel subsidy removal.
He added that the planned protest was going to be an action for the Nigerian people because anti-people policies of Jonathan are going to affect all Nigerians, adding that Labour would mobilise Nigerians.
The NLC scribe further explained that Nigerians were the victims of anti-people policies of the Jonathan administration, pointing out that Nigerians do not need to be educated on what they are undergoing.
“We have said it before that even if NLC did not do anything which is not possible, Nigerian masses will do something. On our part, we are praying that the country should not be dragged into anarchy because of this deregulation policy.”
Also, the NLC deputy president, Comrade Promise Adewusi, while speaking to LEADERSHIP SUNDAY on telephone, urged Nigerians to be ready for a long battle with the government, should it go ahead with the deregulation policy.
Adewusi, who was also the general secretary of the Senior Staff Association of Nigerians Universities (SSANU), cautioned Nigerians not to see the planned action as an NLC affair, but a move for each Nigerian to be liberated.