September 05, 2003
Another Fuel Price Hike?
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About two weeks ago, the perennial scarcity of petroleum product hit the city of Abuja with the attendant endless queue of vehicles at fuel stations and profiteering at the black market where PMS was sold for as high as N100 per litre. In apparent reaction to the emergence of the perennial problem, President Olusegun Obasanjo was widely reported to have posited that an upward price review of petroleum products is inevitable.
The news of the planned increase in the prices of the products has been widely condemned by different segments of the society, political office holders, civil servants, civil society groups, etc. It is indeed an affront to the sensibility of Nigerians, moreso when reasons adduced for the review includes cross-border smuggling and oil bunkering, amongst several other factors. Labour has thus declared its resolve to lead the protest against the planned price hike when implemented.
No doubt, this is another unpopular policy of the Obasanjo administration which when implemented will be met with popular resistance and invariably result in grievous economic losses to the country. Nigeria is still contending with the increased inflation rate and greater impoverishment that resulted from the June 2003 increase in prices of petroleum products. The losses that were incurred during the said 10-day industrial action depleted and made nonsense of the government’s N250 billion projected earnings from the total subsidy removal.
The Federal Government is obliged to justify the use of the sum gained to its coffers from the last price review exercise, before it can begin to talk about another price hike. How did government utilize the additional revenue? What benefit(s) if any accrued to the average Nigerian from the utilization of the revenue? Until the Federal Government provides convincing answers to these and other basic questions, the people will find it increasingly difficult to entrust the government with any additional revenue particularly at the people’s expense.
Meanwhile one cannot but ask what the Federal Government is doing about Nigeria’s four refineries that are now epileptic and grossly undermined. The increasing dependence on importation of petroleum products for our local consumption can in no way guarantee adequate supply and stability of prices. Government needs to resuscitate the ailing refineries to provide the much-desired long lasting solution to the problem of supply and price stability.
CRP therefore calls on the Federal Government to jettison the planned hike in the prices of petroleum products. Periodic hike in prices of petroleum products by the government will in no way provide a lasting solution to the reoccurring scarcity problem. Nigeria’s refineries should be revamped, if the government is serious about developing this country.
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