CISLAC faults new fuel price increase, warns FG against taking Nigerians for granted

Accuses Govt Of Insensitivity

Says Growing Number Of Nigerians Slipping Into Poverty Under Harsh Policies

The Civil Society Legislative Advocacy Centre (CISLAC) has faulted the new increase in fuel pump price by the Nigerian National Petroleum Corporation (NNPC) and warned President Bola Ahmed Tinubu-led government not to take the patience of poor Nigerians who reluctantly bear the dire consequences of the over 300 per cent fuel price increase, for granted.

CISLAC further accused the Federal Government of being insensitive to the plight of the growing number of Nigerians slipping into poverty daily as a result of its harsh policy directions.

Executive Director of CISLAC, Auwal Ibrahim Musa (Rafsanjani), who stated this in Abuja, noted that the present administration has so far, demonstrated lack of interest in people-centred programs that could help reduce poverty, economic inequality and suffering, adding that the government was inconsistent in the application of its “austerity measures” as it was pursuing outrageous, unsustainable, unjustifiable and reckless spending at the expense of the welfare of its citizenry.

Rafsanjani argued that Nigerians do not know the economic blueprint of this government and this is the repercussion of the absence of political accountability under President Tinubu right from his campaigns when he refused to participate in the political debates to enable the citizens to track his commitments towards socioeconomic and political reforms that can reduce corruption, poverty, unemployment and improved well-being of Nigerians.

He said, “Nigerians still remain the ultimate burden bearers of the government’s failure to take effective preliminary, decisive and demonstrable actions towards addressing oil and gas sector challenges. Citizens have been taken for a joy ride and lied to at every step of the way by various beneficiaries and stakeholders in the value chain.”

Rafsanjani stressed that the major effect of the subsidy removal is its knock-on effect on prices of goods and services as increased transportation costs due to the high fuel prices, directly impact agricultural production and have implications for food security.

The Executive Director called on the government to show real concern and take urgent actions to cushion the effect of its decision which is perpetuating poverty and inequality stressing that this is widening the country’s already-existing income inequality with low-income citizens and vulnerable segments of society facing greater financial strain to meet their basic food needs.

He said, “On 1st June 2023, the Group Chief Executive Officer, Nigerian National Petroleum Company Limited, Mele Kyari, in response to the rising prices of PMS, alleged that competition among major players in the oil sector would force down the price of petrol as against the upward trends that have caused panic in the country. Similarly , in trying to allay fears of citizens, the Independent Petroleum Marketers Association of Nigeria (IPMAN) on the 1st of July 2023, denied the alleged plan by the association to increase the pump price of Premium Motor Spirit (PMS), also known as petrol, to N700 per litre nationwide” .

Rafsanjani who stated that the recent increase in petrol prices has been attributed to an increase in crude oil prices in the international market, with Brent crude benchmark price surpassing $80 per barrel; as well as the increase in the Dollar to Naira exchange, wondered why there are no corresponding adjustments in prices when these factors go in the opposite direction?

He pointed out that so far, out of over 56 companies that applied for import licenses to bring in petrol, only 10 made commitment to import, and only three have imported petrol into the country.

“What are the underlying drivers of this low investor response, that should drive competition and force down the price of petrol? He asked.

According to him,” In January this year, daily petrol consumption was 62 million litres; February, 62 million litres; March, 71.4 million litres; April, 67.7 million litres; May 66.6 million litre; June, 49. 5 million litre; and now 46.3 million litres, a 35 per cent reduction and while this suggests reduced demand, it does not suggest a reduced dependence on it.

“Less people can afford petrol to meet their transportation, home-powering and other needs, and Small and Medium-size Enterprises (SMEs) are facing difficulties in accessing affordable power. This has huge implications for businesses which rely on refined crude products like diesel and petrol, respectively.

“Petrol and diesel prices negatively and significantly affect manufacturing output in Nigeria. There are at least, 39.6 million micro, small and medium enterprises (MSMEs) operated in Nigeria as of December 2020, accounting for 96.7 per cent of businesses, 87.9 per cent of employment, and 49.7 percent of national GDP. Totaling about 17.4 million enterprises, they account for about 50 per cent of industrial jobs and nearly 90 per cent of activities in the manufacturing sector, in terms of number of enterprises.

“The trade deficit of $20 million recorded in November 2022 from the low crude oil export receipts signaled the urgency to jettison petrol subsidy, develop local production capacity and end fuel import dependency for a favourable balance of trade”, he added.

Rafsanjani argued that while it is true that no nation has control over the price of crude oil, several measures can be put in place to mitigate the effect of oil price volatility on the country’s domestic economic productivity.

He observed that the current underutilization of Nigeria’s refineries impedes the country’s ability to meet local demand and its economic potential. Nigerians are yet to receive firm commitments, actions and timelines on the delivery of our four moribund refineries to optimal operations.

“Furthermore, the private and modular refineries have a refining capacity that will strengthen Nigeria’s refining sector, eradicate dependency on imported oil products and lead to improved crude export earnings.

“We must build a democracy centered on public trust and accountability. Unfortunately, we have a history, practice and tradition that has encouraged the misconception of the government as the public’s master and not its servant and this notion must be reversed”, he added.

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