SUNDAY PUNCH, August 28, 2005
New fuel price: No going back – Obasanjo
Musa Simon-Reef, Bukola Ojeme and Kunle Owolabi
Despite the public fury over the latest fuel price hike, President Olusegun
Obasanjo on Saturday said there was no going back on the increase.
The increase in the price regime is the tenth since he assumed office in 1999.
The prouncement of the president on Saturday during his monthly radio programme,
the president explain, came as the Federal Government on Friday night moved to
frustrate the frantic bid by organised labour and civil society groups to resist
the new price regime.
Some top government officials reportedly met with representatives of Labour till
the early hours of Saturday in an attempt to dissuade it from embarking on a
A national officer of the Nigerian Labour Congress [NLC], who craved anonymity,
told Sunday Punch that details of the discussions were still being kept under
wraps because the two parties agreed to resume talks on Wednesday.
In a bid to whittle down the planned protest against the hike in the price of
petrol, government, according to a source, was considering various measures to
cushion the effects of the increase.
One of the measures, the source explained, was ordering the oil marketers to
effect a slight reduction in the hike and also provide some buses that would
cushion the impact of hike on transport fares.
The absence of Mr. Adams Oshiomhole at the negotiation, according to a source,
might have hampered full negotiations with some officials of organised labour
and the source disclosed that full talks would commence next week when the NLC’s
President would have arrived from an oversea trip.
Attempts by our correspondent to speak with the NLC’s General Secretary, Mr.
John Odah on phone was not possible as his handset was switched off. The NLC is
expected to meet on Wednesday to consider the issue of the price increase and
what steps organised labour would take in tackling the latest increase.
Many filling stations in Abuja were selling at discriminatory prices. Conoil
stations were selling at N67 per litre, Advanced Link at N65 per litre and AP
Filling station at N70 per litre.
Another source said the leadership of the House of the representatives has also
summoned officials of the Petrol Price Regulatory Agency [PPPRA] for a meeting
on the same day over Friday’s price hike.
But, featuring on his monthly radio programme, The President explains, on
Saturday, President Olusegun Obasanjo foreclosed a possible reversal of the new
He explained that the latest price hike was necessitated by the prevailing
global rise in the price crude oil coupled with the need for wise spending by
the government at home.
Under the latest price regime, petrol now sells for between N65 and N70, while
the price went to N72 from N60.
The authorities claimed that the price hike became inevitable owing to the heavy
subsidy on fuel importation as a result of the rising price of crude oil in the
international market. A source at the Presidency said the government was not
unaware of the short-term consequences of the new price on the people; hence it
planned to roll out some palliative measures.
But the representatives of Labour at the meeting insisted on a reversal of the
increase, the ninth in the life of the present administration since 1999.
The House, which on Thursday unequivocally declared its opposition to any price
hike, reacted spontaneously when the PPRA announced the new fuel price in Abuja.
The House directed the Chairman of the House Committee on Downstream and
Petroleum Refineries, Mr Obetan Obetan, officials of PPRA to press for a
reversal to the old price of N55.
The House in plenary had passed a motion on Thursday, rejecting the proposed
increment, mandating the Committees on Labour and Downstream and Petroleum
Refineries to commence the process of whittling down the powers of the PPPRA to
fix prices under the Act establishing it.
A source close to the House said the Speaker, Alhaji Bello Masari, telephone
with some of his colleagues and agreed to press for a reversal.
“As I talk to you now, the relevant Committee Chairman has been directed to
immediately summon the PPPRA and press for a reversal, because as the
representatives of the people, we cannot stand by and watch further
pauperization of the populace” he added.
The source, a member of the House who begged not to be named stated ?the general
view is that we cannot foist further hardship on the people of Nigeria. The
Chairman of the Committee would be meeting with the PPPRA to let them know that,
the increase in petroleum is unacceptable”
The Chairman, House Committee on Downstream and Petroleum Refineries confirmed
the directive in a telephone interview with Sunday Punch.
?We are meeting with PPPRA.I don’t want to use the word summon, we have called
them for discussion on Wednesday.
?The basis for our meeting with the PPPRA is to let them know the feelings of
Nigerians. I don’t want to speak further on the matter, wait till Wednesday to
know what we are going to tell them,” he said.
Obasanjo said that the Federal Government seemed to have no alternative than to
respond to the global trend in the oil market.
He described the incessant rise in the price of crude oil in the international
market as an abnormality, saying such price could not be sustained.
He debunked the opinion that further increase in price of fuel will impoverish
Nigerians and undermine government’s poverty reduction programmes. He argued
that increase in fuel price does not translate to poverty, rather the
non-judicious use of additional revenue accrued from oil exportation.
“When you talk about Nigerians being poor, what are the indicators of poverty we
are talking about? They include lack of healthcare delivery, lack of portable
and drinkable water, lack of education for the children and lack of good road.
These are indicators that translate to either short span of life, poverty in
preparing individual to be able to face life.
The additional revenue we get from oil should be better put into these areas –
energy, water, roads, education and healthcare facilities. And that is when you
start removing poverty from those who are absolutely poor,” the president
Obasanjo further said that government could not continue with steady rise in the
amount of subsidy it spent on fuel importation, disclosing that government had
spent N112 billion on subsidy within six months.
While decrying the situation in which the local consumers will bear the brunt of
the fuel hike, he equally said it would be unsustainable for the government to
carry the totality of the new fuel increase.
Said the President: “The price o oil today at the world market, to my mind, is
an aberration. I want to believe that it is not sustainable. But all the same, a
situation where within a period of six month, Nigerian National Petroleum
Corporation (NNPC) has used N112 billion to subsidise fuel is unsustainable. So,
what I understand is that while the whole rate of the increased cost of fuel is
politically inadmissible to be put on the consumers, it is also economically
unsustainable that the consumer should not bear part of that increased cost in
fuel. So, that really is the issue. He said the country had not been luck to
have a stabilisation fund to fall back on in the event of fuel hike like this,
saying such funds would have used in cushioning the effect of such increase. He
rejected a situation in which he the federal government would dip its hand into
the federation account to augment the ache arising from the increase. He,
however, promised that some palliative measure would be worked out.
“I don’t like taking money from the federation account and say this is
stabilisation fund and it is for possible increase in the oil price. The reason
is that federation account belongs to the local government, state government and
the Federal Government and we cannot get the three of them agreeing annually for
that type of thing.
“Secondly, passing everything onto the Federal government is also not fair. If
we have something fairer, we can do, we are looking into all sources of
possibilities. And I believe we will be able to do that,” Obasanjo promised.