Fuel price hike and the people’s elasticity limit

Nigerians are angry and disenchanted with President Muhammadu Buhari’s government over the recent increase in electricity tariff and the pump price of petrol. While the Nigerian Electricity Regulatory Commission raised the tariff by over 100% from N30.23 for 1Kw/hr unit per hour to N62.23 per Kw/hr, the Pipeline Products Marketing Company hiked the fuel price to N151.56 per litre, up from N148. The third time in three months! For an oil-producing country, and with the hindsight that the cost of consumables are indirectly tied to fuel price, the increases lack any human face.

Worse still, coming at a time that people are still battling with the negative effects of the COVID-19 pandemic, when virtually the cost of living has skyrocketed, it smirks of insensitivity on the part of the government to inflict more pains on the hapless citizens. In more responsive climes, governments have come up with various palliatives, as buffers to cushion the deleterious damage the disease has done.

Against this dark backdrop, many Nigerians now recall with glee that under former President Umaru Yar’Adua, the cost of petrol was at N65 per litre, diesel stood at N112 per litre and other essential items cost far less than we have today. For instance, a bag of rice then was N3,500 but now it stands at N25,000 or thereabout, depending on the type.

The equations make no economic sense, at all. How do we explain the fact that the nation’s three comatose refineries in Port Harcourt, Kaduna and Warri recorded a combined loss of N50bn in five months from January to May? That is according to Energymix Report of May 30, 2020.

Yet, the Nigerian National Petroleum Corporation reportedly spent over N535. 9bn on subsidy in the first quarter of 2020 when no drop of fuel was produced! This was disclosed by the corporation in its Monthly Financial and Operations precisely in July, 2020. The Chairman, Society for Petroleum Engineers, Joseph Nwakuwe, said the refineries post an average of N10bn on a monthly basis, noting the country cannot afford to record losses in that huge number.

The situation informed the oil expert’s warning that should the country fail to sell the refineries now, they may not get value for them anymore.

Recall that when the Jonathan administration increased fuel price from N67 to N97 in 2012, it sparked off mass outrage with the Save Nigeria Group led by Pastor Tunde Bakare spearheading rallies at the popular Gani Fawenhimi Park. 

“My government was severely criticised for increasing the pump price of petroleum from N67 to N97 at a time that global crude price was going for over 100 dollars. The pump price was later reduced to N87 when the price of crude oil dropped and they attacked us that it was supposed to be lower. Those who criticised my administration are not talking again now that the global crude oil is about 53 dollars per barrel and the pump price of petrol is N143,” – Jonathan in October 2017. But now, it has jumped to N151.56 per litre. We should all be wiser now, shouldn’t we?

A former Deputy National Publicity Secretary of the APC, Timi Frank, wants organised Labour to mobilise Nigerians and shut down the country!

For me, it goes far beyond all that. Many of us have not been groomed to place the national interest above our personal and pecuniary interests. Still blaming the Peoples Democratic Party for our current woes is an admission of leadership failure on the part of the Buhari government, after five years in the saddle. 

True leaders do not give excuses for failure but find the reasons to succeed. Both Lee Kuan Yew (of the blessed memory) of Singapore and Paul Kagame of Rwanda never met their countries in a state of paradise. The opposite was the situation. Instead of blaming past administrations for the redolent rot in the system, they rolled up their sleeves and did the needful, with uncommon vision, passion, courage and commitment.

What the recurring ugly hike in the prices of fuel, electricity tariff, labour matters, salaries and sundry taxes, mostly controlled by a powerful centre teach us is to restructure this country, once and for all. Let the federating units utilise their resources based on the most pressing needs of their people and do so in their best interest, as well. We have had enough of this self-deceit!

One’s fervent hope is that all the increasing charges on essential commodities will not stretch the patience of Nigerians beyond the elasticity limit.

Baje writes from Ikeja, Lagos

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