Despite promising to bring down the price of petrol during his campaign, President Bola Tinubu has repeatedly increased petrol price by about 488 per cent – from N175 in May 2023 to N1,030 in October 2024 – inflicting more pains on the already impoverished Nigerians, reports DARE OLAWIN.
The first assignment performed by President Bola Tinubu when he assumed office on May 29, 2023, was the removal of the petrol subsidy. Immediately after he took the oath of office, Tinubu, like a man in a hurry, quickly announced, “The fuel subsidy is gone.”
Immediately after the pronouncement, the country’s economic situation took a downward dive, changing for the worse. Filling stations, including the ones owned by the Nigerian National Petroleum Company Limited, raised the pump price of petrol to above N500 per litre. Some Nigerians, who had hoped that the new administration would turn around the situation positively began to feel uneasy; though they were persuaded by the President, who stated that there would be gain after pain.
Remarkably, Tinubu hiked the fuel price without recourse to the promise he made in Abeokuta during his campaign that he would bring down the price of petrol.
While campaigning, Tinubu and the other major contestants vowed to remove fuel subsidies if elected into office. However, when he was in Abeokuta in Ogun State, the then-candidate of the All Progressives Congress appeared to have backtracked when he promised to bring down fuel prices. The former Lagos State Governor had accused the Muhammadu Buhari administration of causing artificial fuel scarcity to make him lose the election.
Addressing APC supporters in Yoruba, Tinubu said, “Won ni epo ma won, o ma di N200, o ma di N500. E lo fokanbale, a maa gbe wale” meaning“They said there would be a fuel price hike; that it will rise to N200, to N500. Put your mind at rest; we will bring it down.”
This elicited jubilations from the crowd who saw the Lagos politician as a messiah. However, the reverse has been the case since he’s been at the helm of affairs in the last 16 months.
To the average Nigerian, petrol means more than what it is in other countries. The country’s economy depends almost solely on fuel. Both the rich and the poor need petrol for one activity or the other, it may be for vehicles or to run engines used for commercial services.
Also, in a country where over 85 million people have no access to electricity, petrol has always been the hope of the people, both the rich and the poor alike, to avoid darkness. Nigeria is also one of the largest markets for power generators in the world.
With the rising cost of petrol, access to electricity has been reduced, especially in rural communities.
Similarly, those who don’t have reasons to buy petrol feel the impact of the price hike whenever they try to use public transport because commercial drivers have jerked up the cost of transportation. With the high cost of transportation, the prices of items in the markets have continued to rise daily.
The masses’ problem was compounded about two weeks after Tinubu’s inauguration when he also floated the naira.
In June, the Central Bank of Nigeria directed Deposit Money Banks to remove the rate cap on the naira at the Investors and Exporters Window of the foreign exchange market, to allow for a free float of the national currency against the dollar and other global currencies.
Following this development, the naira depreciated from around N400 per dollar to over N700/dollar during trading on the I&E window on June 14, 2023. Today, the naira has further lost its value, trading at over N1,600 as of Wednesday.
This means the price of petrol would continue to rise because the product is priced in dollars.
When the President devalued the exchange rate, the cost of petrol rose again. However, the NNPC quickly introduced subsidy payment through the back door. While the landing cost of petrol was around N1,200, the NNPC sold at half the price based on the promise of the Federal Government to pay the shortfall or what was tagged “under-recovery.”
For close to a year, the NNPC sold the product at about N600/litre. The oil firm kept denying claims that it was paying subsidies.
Recently, however, the energy firm admitted to selling below the cost price.
The Chief Financial Officer of the company, Umar Ajiya, stated, “In the last eight to nine years, NNPC has not paid anybody a dime as subsidy; no one has been paid a kobo by NNPC in the name of subsidy. No marketer has received any money from us by way of subsidy.
“What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price. So, the difference between the landing price and that half price is a shortfall.
“And the deal is between the federation and NNPC to reconcile. Sometimes, they give us money, so there is no money exchanging hands with any marketer in the name of subsidy,” he said.
