Reverse The Increase In Fuel Price

Without consultations with relevant stakeholders, the Federal Government arbitrarily increased fuel price recently despite the current economic realities in the country. The action has justifiably elicited protests by some Nigerians. But rather than listen to the voice of the people, the government appears resolute to continue with the unpopular decision. It is worthy to note that Nigerians have been tolerant with this administration despite its many missteps. Earlier this year, the increase in Value Added Tax (VAT) from five per cent to 7.5 per cent took effect.

And just recently, the government increased electricity tariff from N22 to N66 per kilowatt-hour with effect from September 1. To worsen matters, fuel price has gone up for at least four times this year. It was only in March that it came down from N145 to N125 a litre due to the collapse of crude oil prices in the international market.  In June, it went up to N123.50 from N121.50. In July, it came up to N143.80 per litre from N140.80 per litre. Last month, it went up again to between N148 and N150 a litre. And now, the price hovers between N158 and N162 per litre.

The recent fuel price increase is far higher than the previous ones. As at the year 2000, fuel price was N22 a litre. In January 2002, the government of Chief Olusegun Obasanjo increased it from N22 to N26 a litre. From 2002 to date, successive governments, except the administration of the late President Umaru Yar’Adua, have increased fuel prices for over 10 times.

In January 2012, the administration of former President Goodluck Jonathan increased it from N65 to N141 per litre. This engendered nationwide protests tagged #OccupyNigeria. The protests forced Jonathan to rescind his decision and reduce the price to N97 a litre. It was further reduced to N87 a litre following the crash of crude oil prices in the international market in January 2015. Jumping from N87 a litre to N160 a litre within a period of five years is not a good commentary on the present regime.

Part of the usual justification for the price increase is that fuel is cheaper in Nigeria than in many other countries such as the United States. Unfortunately, the government fails to realise that the standard of living in the US is higher than that of Nigeria.

The Minister of State for Petroleum Resources, Timipre Sylva, recently argued that petroleum products were strategic commodities, which the government will not allow marketers to wholly determine their prices. At the same time, the depot price of these products should not be wholly determined by market forces and the crude oil prices in the international market. There is need for the government to intervene.

Moreover, the timing of the price increase is wrong. The coronavirus pandemic has affected many businesses. Currently, the rate of inflation is very high. The prices of essential commodities, like bread, yam, and rice have also skyrocketed.  More Nigerians are being impoverished as their disposable incomes have shrunk considerably. The situation has made nonsense of the new N30,000 national minimum wage. It is likely to engender unemployment and rise in insecurity.

Understandably, some Nigerians took to the streets to protest the hikes. In Osun, Ogun, Ondo and Oyo States, placard-carrying protesters urged the government to reverse the decision. Some civil society groups also expressed outrage over government’s action. For instance, the Socio-Economic Rights and Accountability Project (SERAP) threatened to take legal action against the government if the hike was not reversed. The Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) also flayed the increase. Unfortunately, government has vowed not to rescind its decision. Sylva said market forces would continue to determine the price of fuel and that payment of subsidy was no longer sustainable. We call on the government to listen and implement the wishes of the majority of the people who elected them into office. It should bear in mind that the welfare of the people supersedes any other interest.

For so long, the poor masses have been emasculated by some of the economic policies of the government. There are reports that the latest action is part of the requirements for the approval of a proposed World Bank loan for the power sector. If this is true, we advise the government to tread with caution.  There are some other ways to make the situation less painful for the people.

Government should think of repairing existing refineries and building new ones so that the nation can export refined petroleum products. This is the time to cut the cost of governance. It does not make sense for public officials to live in opulence while the masses live in excruciating poverty. We urge the government to rescind forthwith the fuel price increase.

Daily Sun Editorial

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