President Bola Tinubu said his government will not allow a further rise in the price of petrol from the current rate of N617, effectively ending the deregulation of the sector and reintroducing price controls.
The president said there will be no further increase in the pump price of petrol despite market dynamics.
The measure means the government will reinstate petrol subsidy if oil prices or the landing cost of imported petrol go up.
Presidential spokesperson Ajuri Ngelale claimed the administration was not bringing back petrol subsidy three months after scrapping it. He did not explain how the government planned to cover the difference in cost.
“The president wishes to assure Nigerians, following the announcements by the Nigerian National Petroleum Company Limited (NNPC), just yesterday that there will be no increase in the pump price of petroleum motor spirit anywhere in the country,” he said, using the government’s official name for petrol,” Mr Ngelale said Tuesday.
“We repeat, the president affirms that there will be no increase in the pump price of petroleum motor spirit.”
“The president also wishes to affirm that there are presently inefficiencies within the midstream and downstream petroleum sub-sectors that once very swiftly addressed and cleaned up will ensure that we can maintain prices where they are without having to resort to a reversal of this administration’s deregulation policy in the petroleum industry,” Mr Ngelale said.
He said: “The market has been deregulated. It has been liberalized and we are moving forward in that direction without looking back.”
– Punishing decision
Mr Tinubu announced the removal of petrol subsidy in his inaugural speech on May 29, sending prices from N185 to N537 a litre. The price rose further to N617.
The increases pushed the prices of goods and services skyward and stoked inflation, causing millions of families immense economic suffering.
On Monday, fuel marketers warned that things may get worse as the naira plummeted last week to 955 to a dollar in the parallel market, where most importers source forex to import petrol.
They warned that the retail price of petrol in Nigeria was bound to rise to between N680 and N720 a litre in the coming weeks if the dollar continues to rally against the naira.
“It is simple mathematics, once the dollar is going up, have it in mind that the prices of petroleum products would definitely increase because the products are dollar-driven,” Chinedu Ukadike, national public relations officer of Independent Petroleum Marketers Association of Nigeria, told Punch.
“Nigerians should brace for a price regime of between N680 to N720 if the exchange rate stays around N910 to N950/$, but the price is going to hit N750 once the dollar rises to N1,000.”
The traders urged the government to intervene.
The organized labour warned that workers will resume a nationwide strike without notice if there was further increase in price.
After the report, the Nigerian National Petroleum Corporation (NNPC) said it would not increase the price petrol further.
Mr Tinubu’s spokesperson said labour unions’ threat to go on strike was “premature.”
“We believe that the threat was premature and that there is a need on all sides to ensure that fact-finding and diligence is done on what the current state of the downstream and midstream petroleum industry is before any threats or conclusions are arrived at or issued,” he said.
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