Nigerian government rejects call to increase fuel price

FILE PHOTO: Fuel Queue
FILE PHOTO: Fuel Queue

The Nigerian government will not increase the pump price of petrol despite a demand that it should do so, officials have said.

The forum of former Group Managing Directors of the Nigerian National Petroleum Corporation, NNPC, on Sunday called for the price increase by calling for a removal of price cap in the pricing template.

A removal of the price cap would mean that marketers would be free to sell petrol at their desired price, based on several factors such as the exchange rate and international crude price. With the Naira exchange rate going down by over 50 per cent to about N412 since the current petrol price was fixed, approving the recommendation would have meant Nigerians pay more for petrol.

The Nigerian government through the Petroleum Products Pricing Regulatory Agency, PPPRA, however, said on Monday that it will not accept the advice.

The former GMDs had in a 12-point communiqué at the end their meeting with the incumbent GMD of the NNPC, Maikanti Baru, said the price cap of N145 per litre of petrol was “not congruent with the liberalization policy.”

The removal of the cap under a liberalised market environment would allow marketers of petroleum products to sell products at any price to enable them recover cost.

The Forum said the current ceiling price of N145 per litre did not factor the current foreign exchange (FOREX) rate and other price components of the pricing template, like crude oil cost and Nigerian Ports Authority (NPA) charges, which remain uncapped.

While stating the government’s response, the acting Executive Secretary of PPPRA, Sotonye Iyoyo, said the proposal was the personal opinion of the former state oil chiefs.

“If it was a recommendation, that is what it is – a personal opinion. I’m not aware government is planning any fuel price increase. We are in a liberalised market already,” she told PREMIUM TIMES.

The spokesperson of the NNPC, Garba Deen Mohammed, also described the advice as an “opinion.”

“The forum was expressing its opinion, which it is entitled to,” Mr. Mohammed told PREMIUM TIMES. “NNPC is a player in the petroleum industry and has a right to have its views about the industry. Nobody is bound by the opinion.”

First line charge

In the communiqué, the forum also asked the federal government to include funding of joint venture operations as first line charge to guarantee sustainable oil and gas production and national reserve growth.

The industry has, for years, been contending with challenges of dwindling investments to grow production and national reserves, due to inability of government to meet its funding obligations to the joint venture regularly.

The meeting also reviewed issues affecting operations of the oil and gas industry as well as recommendations to resolve them.

The issues include the insecurity in the Niger Delta, NNPC’s poor corporate reputation, poor state of the country’s refineries, current state of petroleum products supply pricing template, and need to focus attention on the Chad Basin in the ongoing frontier oil exploration activities in the northern part of the country.

Other issues include operations of the National Petroleum Investments Management Services, NAPIMS; Petroleum Industry Bill, PIB; NNPC’s relationship with its partners; NNPC’s dwindling revenue base and rising debt profile as well as its widening pension funding gap.

During the meeting, Mr. Baru presented the status of NNPC’s finances and the state of the oil and gas industry, spanning his management’s 12 business focus areas towards restoring the corporation on the path of growth and profitability.

In its review of the current state of industry and ways to resolve issues militating against its progress, the meeting was concerned about declining production levels and the consequences on the country’s revenue.

On insecurity, the meeting noted the threat to oil production and damage to the Niger Delta environment. It said there was need for government and security agencies to refocus their engagements with the various host communities to build sustainable partnership toward a lasting solution to the problem.

The former GMDs urged government to ensure the refineries were refurbished using the Original Equipment Manufacturers (OEMs), while their operations were restructured as Incorporated Joint ventures (IJV) modelled after the Nigerian Liquefied Natural Gas (NLNG), with credible technical and financial partners.

The meeting also asked the government to ignore the proposal in the draft PIB for an NNPC investment subsidiary, NAPIMS, to be removed from the state oil firm. it said that would inhibit its effective function as a national oil company in comparison with its peers in other countries.

On its dwindling revenue base, the former GMDs said they were concerned with the situation and called for particular attention to be focussed on revenue generating entities – the Nigerian Petroleum Development Company, the retail arm, and the refineries – to restore its growth and profitability.

Worried by the high level of NNPC’s debt profile, the former oil chiefs urged its management to urgently ascertain its true financial status and immediately decide on the most appropriate capitalization model.

“If the current situation remains unchecked, it could lead to the crippling of the corporation and the nation’s oil & gas sector, the mainstay of the Nigerian economy,” they said.

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  • Arabakpura

    I wish Buhari good luck on this because this is a knell that will summon his administration to heaven or to hell!

  • Watch man

    Build more refineries and fix the existing ones. That is the only way to stop this rubbish of every year price increase.

    • Rommel

      More than 20 licenses were given by the Jonathan administration to people that claimed they wanted to build refineries,the same people also were given DISCOS for power distribution,as we speak,none of those people have been able to even clear the ground where such refineries would be located,that whole exercise was a sham,a gimmick from a cursed President,however,by the time Dangote refinery comes on stream,the whole thing will end which is why they are mounting pressure on government to enable them make as much money as possible before that time comes

      • Netanyahu

        Would Jonathan have forced those Nigerians to commence the building of their refineries? I never voted for Jonathan in 2015 but you idiots are making him a hero as his glaring incompetence resuscitated a dead buhari who has abdicated all his campaign promises, making oyenusi a saint.May I ask, where is the change we were promised by the certificate forger who was prepared to use 2000 SANs to defend a criminal breach of the constitution? Just leave Jonathan out of this. We have a huge dullard at the helm of affairs of a cursed country that have been suffering in the midst of plenty. Nonsense!

        • Rommel

          Anybody raised properly uses words carefully,obviously,your upbringing is self evident,however to the point,let me hope that you would understand the point which is that genuine investors were muscled out in favor of political contractors who were only interested in selling the licenses to whoever was interested,it was unfortunate.

      • dan

        When did Dangote get his license?

  • Otile

    This is a headless government indeed. Nigeria is in deep doodoo. It will be bla bla bla till 2019 nothing achieved then the apes in APC will cry that their headless leader needs another term to achieve something since Jonathan left nothing in the treasury for him. When they sense that people are not going to buy their deceit again they will invade somewhere in the SS SE to hold on to power. Olorun maje o.

  • Rumournaire

    I wonder if the people asking for a price increase are in touch with reality at all. In Lagos, several stations are, on their own volition, selling PMS for prices ranging from N139 to N143 per litre. They cannot be selling at a loss as no one forced them to reduce their price. How then can anyone call for a price increase?

    Really, the government needs to completely hands off fuel prices. No need to announce any price cap or any price at all. No one announces the price of diesel – the price finds its level. Let the market determine PMS price as well.

    • Otile

      Boohoo! We told you so. This is a deceit. The consumers are not the ones asking for price increase. Islamic APC chieftains are the ones planting this propaganda, so that Buhari appears to be reluctant to yield to pressure. In the olden days IBB cunningly sent some Yorubas to cry in public that he should become a civilian president, when decent people resisted the move Yorubas threatened those who opposed Babangida’s life presidency. Now again, nobody is urging the government to increase oil price. It is all hoax, Buhari and his voodoo economic team are deceitful.

      • Rumournaire

        My friend Otile, you know when you go tribal, you lose me. I have no further comment.

        • Otile

          People know what I am talking about, but nobody wants to talk details for fear of appearing tribalistic. You too know what I am talking about, you know that this is a hint from the deceitful government that price increase is around the corner. You don’t need a mirror to see what you are wearing on your hand.

  • Rommel

    Onething is clear,should the cap be removed,fuel marketers will conspire and fix prices considering that Nigeria has very weak institutions and corruption is rife,I believe the government should also sell the product at realistic controlled prices to act as check

  • Idara-Etuk

    The solution to this madness is to refine our own crude LOCALLY!!! Whys is that so damn difficult?!! The empty headed pot bellied, cow leg eating former GMDs must be off their heads to have suggested a price increase at a time people can barely feed. Mad mad people!! Sigh!!!

    • Man_Enough

      Your question is apt! Why is it difficult? Even a kid knows this is the best solution.

  • Dazmillion

    It Buhari had entertained the idea of increasing fuel, he would have faced the mother of all riots never seen in the history of Nigeria. The one that happened during Jonathan era would have seemed like a peaceful picnic in the park.

    • yusuf Mikail

      Then Welcome to anarchy or secret subsidy payments.

  • yusuf Mikail

    This was how it started with devaluation of the Naira. Yes. No. Yes. No. No. Until, we know what happened after. God will deliver Nigerians from APC.

  • Truth Justice Equity

    Another almajiri dance and somersaults in the air.believe this integrity deficient government to your own peril.this was exactly how we arrived at the first petrol price hike and forex wahala.
    These people are indeed terrible, shameless and heartless, why are they openly mocking Nigerians,by the time buhari finish with Nigeria, Nigeria shall be like a nation hit by tsunami, earthquake, Ebola and hurricane merged together.
    There had been no evil and misfortune that Nigeria have not suffered since the coming of pmb to power,it is likely that this man has an evil spell and very bad and negative aura.I have been here for a very long time ,but never in the history of Nigeria have our nation and people become so humiliated,traumatized, suffered hardship ,pain,sorrow and death as within buharis 15 months as civilian President of Nigeria. This a classical example of a nation mourning.never in the history of Nigeria have our naira ever exchanged at 420 to a US dollar,never in the history of Nigeria have Nigerian citizens being murdered by an army of conquest like Fulani herdsmen, never in the history of Nigeria have Nigerian citizens starving to death as in a war time, never in the history of Nigeria have Nigerian citizens become so hopelessly perplexed and badly cast down as today without hope or succour from anywhere. Truly our nation is passing thriugh great tribulations and only divine intervention can save Nigeria from being completely cast down.buhari is a curse on Nigeria, may shame ,distress, pain and sorrow be the portion of all those who used false promises and electoral fraud and wicked manipulations to impose this sorrow,pain and death on Nigeria. May they and their generations bear the recompense of their wickedness against the people and the nation of Nigeria. may God hastily come to our help before it is too late for Nigeria.amen

  • Nigerian citiz

    I wont be surprise if petrol sells for #300 in December 2016

    • adeade

      My friend, i am with you.. Nigerian government is trying to hint people to get ready for fuel price hike…this headline is a form of propaganda towards achieving their goal.. it is well with my country..

  • blueeyedkitten

    we made over 91 trillion naira from the sales of crude. no government since 1960…apart from buhari/84, who built 4(working at maximum capacity then) when our population was about 60 million, felt the need to build more.
    now our population has exploded to over 180 million, and we dont have a single one working even at 40% capacity. we enjoy buying refined petrol from abroad as that would always keep our corrupt genes intact. what kind of people would be running their country like this? what a stup!d country!

  • Myson

    Unless government decides to subsidize petroleum products again, of which I do not see them doing so considering what it took them to relinquish it, Nigerians will continue to pay more on pump price for petrol. The two determining factor as what Nigerians pay at pump are prices of international crude oil and exchange rate of Niara to Dollar. As Naira slides against Dollar toward #1000 to a $1, it is possible to see pump price of #450 per litter and so on.

  • separation is the answer

    A report released by the United Nations says Nigeria is in a fix.

    It said the country had been deeply divided along ethnic, religious and regional lines.

    It painted a gloomy picture of the country’s economy, noting that most of the development and social indices in the country were below acceptable standards.

    The report, which was read during a consultative meeting on the formulation of the UN Development Assistance Framework IV for the South-East zone, in Awka, Anambra State, observed that for decades, different segments of Nigeria’s population had, at different times, expressed feelings of marginalisation.

  • NinjaK

    Of course they are lying as usual…..we shall see…

    • Bakassi Boy


      I am hearing that some disgruntled elements are grumbling that President Buhari will
      increase petrol price to 200 Naira per litre soon because of BUHARI’s devaluation of
      the Naira on the street at today’s price of 430 Naira to one dollar. Why the grumble?
      Where were these Nigerians, four months ago, when President Buhari increased
      the same petrol price from 96 Naira a litre to 145 Naira a litre in one stroke?
      Why did these disgruntled elements not complain at that time?

      Nigeria Labour Congress called strike action at the time to protest that increase but
      uselessly adamant Nigerians refused to answer the NLC or go on any strike action.
      Therefore, all Nigerians must shut up once President Buhari announces 200 Naira
      per litre increase. Since Nigerians accept SAI BABA economics of higher and higher
      tax, they can’t turn round in the middle and complain of anything. The Police must
      import more bullets to shoot dead anybody angry at 200 Naira to a litre of petrol.
      Useless people deserve useless government.

      • NinjaK

        easy o….lol

  • Okokondem

    According to this article,

    “The forum of former Group Managing Directors of the Nigerian National Petroleum Corporation, NNPC, on Sunday called for the price increase by calling for a removal of price cap in the pricing template.”
    “The former GMDs had in a 12-point communiqué at the end their meeting with the incumbent GMD of the NNPC, Maikanti Baru, said the price cap of N145 per litre of petrol was “not congruent with the liberalization policy.”

    As many have correctly pointed out here, after 50 plus years of oil exploration in Nigeria (just as we have no viable railway system or national airline) we have no full functioning oil refineries for a country that produces more than 2000 barrels per day under normal circumstances. It begs the question why the current Group Managing Director, GMD of the NNPC would seek advice from former GMDs through the so called forum when history has shown that these former GMD have failed us. Question is, do they remain in the employment of the NNPC after retirement as GMD? If the answer is no isn’t therefore safe to assume whatever policy proposals they may have is not for the benefit of the Nigerian fuel consumers rather for whoever their employers may be in the private sector, such as the multinational corporations? So by recommending an increase in the price of fuel we a good understanding of whose interest they are protecting.

    Which takes me back to my original question, what is the essence of the forum that creates a platform in which retired GMDs make policy proposals for the current administration? What knowledge or wisdom do they impact on the current GMD when it is common knowledge that they didn’t do such a great job during their tenure?

    This is one of those things I find perplexing about my country. We keep recycling “leaders” and ideas that have not served us well in the past. It is no secret that the introduction of military rule did not serve our country well. Yet we seem to have a fascination with recycling former. Former military rulers believe only they have what it takes to rule even in the Democratic setting. Former governors whose achievements or track record is questionable at best very easily transition to become senators and vice versa. All of this in a country with a population of over 170 million people many of whom are literate if not educated, although the educated part is debatable because nothing we do supports or demonstrates that. Otherwise why would Nigerians get together on a forum like this and still point fingers at one another in the name of party allegiance or loyalty when in fact it doesn’t matter which party is in charge. We are still without good roads or even electricity. Go figure.

  • SAM .A

    Forum of former Managing directors of NNPC , who are calling for increase in pump price , are the most notorious robbers who had benefitted most from the rot in NNPC , check all their assets one by one you will see what they have accumulated . Let us send them all to Angola and see how much they pay for gas at petrol station

  • vagabonds in power

    Nigerian government rejects call to increase fuel price. If NNPC says it’s not sustainable, it’s simply not sustainable. No two ways about it.

    Fellow Nigerians, get ready for another round of fuel scarcity. The choice is between the devil and deep blue sea. It’s either they increase price and have fuel or refuse to increase price and be good with fuel scarcity.

    Buhari only wanted to become president and be tagged as “former president” hereafter, and you guys simply fell for it. Deal with it. Next, vote right because you can’t afford to have a president who relegated his duties and obligations to the background for six months while trotting the globe just for his selfish aggrandizement (not only taking the opportunity just to shake hands and have photo session with world leaders.)

  • vagabonds in power

    The Northern Nigerian Petroleum Corporation–NNPC to increase fuel price to 150————Blame the woes of Nigeria on the Yorubas————————Nigerian are now commuting suicide as if they are rabbits–no longer humans——–Jumping from high rise building—in unfinished buildings–highways——–just name it——–

  • favourtalk

    I know it from day one that the president care more about the deveoplment of this nation and the common people on our country

  • Austine

    APC kindly please be advised that you can generate funds from licensing of atleast 3-GSM licenses. And stop all these wickedness of 9% Charge on data and voice on Nigerians. The competition will cause improvement of GSM services across Nigeria. You guys imposed 50-naira on every 1000-naira transactions as if that is not enough there is this rumour of fuel increase. Like we know in Nigeria that rumours are always leaked intentions of the government… Stop denying anything………….

  • FreeNigeria

    Forum of former directors, there’s an association for everything in Nigeria. They all advocate for something negative. How can the country move forward with an association of evil people.