Buhari rejects marketers’ demand for price increase
– The subtle call for fuel increase has been rejected by President Buhari
– Marketers are said to be unwilling to import products because of low or insignificant profit margin
President Muhammadu Buhari is said to have rejected a subtle move by marketers for the federal government to increase fuel price.
The president has also rejected the re-introduction of fuel subsidy.
The pressure on government to effect a rise in petroleum price from N145 per litre is coming amidst the current acute fuel scarcity across the country, the Nation reports.
Government sources claim the administration is concentrating on finding permanent solutions to the recurring fuel crisis including checkmating sabotage by some marketers and stakeholders, and putting all the nation’s 23 depots in 100 per cent shape.
Marketers are said to be unwilling to import products because of low or insignificant profit margin and are subsequently seeking full deregulation of petroleum products.
One of the sources said: “The key issue is price war. The marketers have made representation to the federal government and the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu to allow price hike of petroleum products and leave the sector to market forces.
“The President and senior government officials are however opposed to price hike because of its spiral effects on the socio-economic life of the nation. It also has grave political implications for the survival of the present government.
“In the last few months, the government has been trying to cope through the Nigerian National Petroleum Corporation (NNPC) until there was stress in the supply chain following threats by PENGASSAN and the challenge in Lagos.”
Another stakeholder, speaking on the price war, said: “We import refined products as a nation. Once the prices of crude increase at the international market, they have effects on the cost of refined products being brought into our country.
“The landing cost of Premium Motor Spirit (PMS) is between N165 and N170 per litre. The marketers are claiming that the profit margin is insignificant and they cannot recover cost, they say they need to top up prices since they no longer enjoy subsidy.
“Initially, the same marketers said they had subsidy arrears to collect from the government and they will not import products. The arrears have not been appropriated for by the National Assembly and there was nothing the government can do.”
But a government source said: “To mitigate the issues raised by the marketers, this administration put some measures in place. For instance, the government created a special foreign exchange window for the marketers to enable them to import products.
“Instead of using the forex, some of them diverted it to other use. In order not to hold the nation into ransom by the marketers, NNPC in the last one and a half years has been importing 99.9% of products. This sole importation also drains the resources of NNPC but it has to sacrifice to ensure availability of products.
“And if NNPC imports, it sells to marketers but they are still complaining of low profit margin. The importation chain has its own stress because for the storage of the products, NNPC can only accommodate 55% of the products. The oil majors cater for 30% and independent marketers take charge of about 15%. So, at any point, these marketers are still needed.
“The alternative is for all the nation’s 23 depots to be operating at maximum capacity to check the antics of the marketers.”
The news outlet also quoted a minister saying that the government was suspecting sabotage by some stakeholders.
“Before the present crisis, the nation used to consume between 30million to 35million litres of Premium Motor Spirit (PMS) daily but since this current challenge started, the consumption has shot up to 80million litres per day.
“Without a soothsayer, it is obvious that something had gone wrong. We cannot just rule out sabotage including diversion of products.”
Meanwhile, NAIJ.com had earlier reported that President Buhari has with the group managing director of the NNPC, Dr Maikanti Baru over the lingering fuel scarcity in the country.
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The president met with the NNPC boss on Saturday, December 23 in order to find a solution to the issue of fuel scarcity.
Many Nigerians have been complaining about the scarcity with some raising suspicion that it was an attempt to increase price of fuel.
It was reported that the president said he was concerned about the plight of Nigerians.
In a video address, Baru blamed the situation on oil marketers whom he accused of hoarding the commodity.
He assured Nigerians that there was no plan to increase price of fuel and that work was going on to end the crises soon.
Fuel scarcity: This is getting too much for us – Nigerians lament – on NAIJ.com TV: