- Ajaero: Increase inflicting incalculable damage on Nigerians
•Says nothing wrong with subsidising needs of Nigerians
•Motorists, commuters groan over soaring prices
Emmanuel Addeh, Onyebuchi Ezigbo in Abuja, Peter Uzoho in Lagos, Ahmad Sorondinki in Kano and Sylvester Idowu in Warri
Petrol prices have surged to a record N1,500 per litre in parts of the country, unleashing fresh hardship on motorists and commuters, with the Nigeria Labour Congress (NLC) warning yesterday that the latest increase was inflicting ‘incalculable damage’ on Nigerians.
The price shock, which spread across Abuja, Lagos, Kano, Delta and other parts of the country, followed the latest increase in the gantry price of the product by Dangote Petroleum Refinery, coming amid a sharp rise in international crude prices and mounting concerns over supply disruptions linked to the conflict in the Middle East.
With transport operators already raising fares and some motorists abandoning their vehicles, the latest development has renewed fears of another wave of increases in the prices of food, goods and essential services as the higher cost of petrol works its way through the economy.
The latest price surge, which has been reported across major cities and other parts of the country, followed a fresh increase in the gantry price of petrol by the Dangote Petroleum Refinery, which in its latest move, raised its ex-depot price by N85, or 6.7 per cent.
The refinery’s latest adjustment came amid renewed volatility in international crude oil prices, with Brent crude trading above $107 per barrel as tensions in the Middle East intensified and disruptions around the Strait of Hormuz heightened concerns over global oil supplies. Rising crude prices have pushed up the cost of importing and refining petrol, while marketers have passed the additional cost through the supply chain to consumers.
The latest increase is the fourth upward adjustment by Dangote Refinery since August 21, taking its gantry price up by N185, or 15.9 per cent, in less than a month. The refinery had increased the price from N1,165 to N1,185 on August 21, to N1,200 on August 26, N1,265 on August 29 and subsequently to N1,350 on September 12.
The refinery also raised its coastal price to N1,783,530 per metric tonne from N1,669,543, while directing customers to return all Automated Truck Certificates (ATC) for repricing.
Organised Labour Expresses Outrage
The NLC, in a statement signed by its President, Joe Ajaero, expressed outrage over the latest development, saying the increase was coming at a time when pressure on marketers to reduce pump prices in line with international crude prices was beginning to yield results.
Ajaero said the new price increases had inflicted “incalculable damage” not only on workers’ wages but also on the general wellbeing of Nigerians and the economy.
“It is an established fact that when transportation costs go up, everything else follows, including school fees, rents, tariffs, foodstuffs, etc. These new costs continue to inflict or deepen poverty among the populace, stressing the quality of life to the limits,” the statement said.
The Congress acknowledged that the latest surge had been triggered by the resurgence of conflict in the Gulf and the resulting pressure on crude prices, but argued that Nigeria’s status as an oil-producing country should provide some protection for its citizens against external shocks.
It said the country had sufficient local refining capacity, although a substantial part of the capacity was in private hands, and argued that Nigerians should therefore enjoy a measure of protection against developments in the international oil market.
“As a nation, and as a people endowed with enormous fossil resources, we are deserving of a certain level of protection or buffer against the gales from the Gulf, and indeed, other gales,” Ajaero said.
He also criticised the continued exposure of local refineries to imported crude, saying the situation undermined the objective of building domestic refining capacity.
The NLC therefore called on the federal government to immediately provide reasonable wage awards to workers, sell sufficient crude to local refineries in naira and expand national storage capacity as part of measures to create a buffer against energy supply disruptions.
According to the labour centre, the measures would help create jobs, generate economic value and address emerging security challenges. Ajaero also argued that there was nothing wrong with the government subsidising the needs of citizens, particularly during emergency situations.
“At the moment, there is no oil-producing country we know of that has not intervened or come up with sustainable palliatives in one way or the other in these perilous times,” he said. He said the need for government intervention had become more urgent because the country was currently benefiting from higher international crude prices.
According to him, the government was making additional revenue from crude sold in the international spot market, earning between $35 and $40 per barrel above the budgeted benchmark, which he said translated to trillions of naira monthly.
“The government ought to be satisfied with this as it is a windfall,” the NLC president maintained.
The labour centre warned that the consequences of the petrol price increases would extend well beyond the cost of transportation, with higher logistics expenses expected to feed into food prices, rents, school fees and other essential services.
Ajaero also warned that the NLC would not remain silent if the government allowed marketers to continue increasing pump prices without measures to cushion the effect on Nigerians.
“We are of the view that a government that seeks re-election in the next few months cannot afford to stand and watch marketers inflict suffering on the citizenry in the name of deregulation. Labour has an obligation to speak out or act accordingly,” he warned.
Petrol Price Nears N1,500 in Abuja, Environs
In Abuja and neighbouring Nasarawa State, petrol prices have climbed to as high as N1,450 per litre, with motorists in some locations facing the prospect of paying even more as the latest increase filters through the market.
Checks by THISDAY showed that petrol was selling for N1,450 per litre at Hariz and Zamson filling stations along the Abuja-Keffi Expressway in Mararaba, where a large number of people who work in the federal capital reside.
NIPCO and AYM Shafa outlets along Airport Road were dispensing the product at N1,430 per litre, while AFDIN and AA Rano stations on the same route were selling at N1,415 per litre.
At Addahos filling station at Chikakore Junction in Kubwa, petrol was also selling for N1,430 per litre, while Nigerian National Petroleum Company Limited (NNPC) retail outlets were dispensing at the same price.
Other outlets also reviewed their prices following the latest adjustment by Dangote Refinery. NIPCO raised its price from N1,350 to N1,430 per litre, while Mobil outlets increased their prices from N1,350 to N1,400 per litre.
Empire Energy and Sharon filling station in Kubwa were also selling the product at N1,430 per litre as of yesterday evening, while MRS was dispensing the product for M1,395 per litre.
The increases came after Dangote Refinery raised its gantry price by N85, from N1,265 to N1,350 per litre, representing a 6.7 per cent increase. The latest adjustment has intensified pressure on marketers, who say they have little option but to reflect higher acquisition costs in their pump prices.
More Hardship in Lagos
Motorists and commuters in Lagos are also facing higher petrol prices, with pump prices reaching N1,400 per litre in parts of the state as rising crude prices and the latest increase in Dangote Refinery’s gantry price continue to filter through the downstream market.
THISDAY’s checks showed that prices ranged between N1,380 and N1,400 per litre, depending on location and marketer.
MRS filling station at Old Western Avenue, Surulere, was selling at N1,390 per litre, the same price recorded at AP filling station on Awolowo Road, Ikoyi, opposite the THISDAY/ARISE Towers. At FESTAC, MRS sold at N1,396, while Mobil sold at N1,390.
BOVAS at Ojodu Berger sold at N1,400, while an NNPC filling station at Ikosi-Ketu also sold at N1,400 per litre. SKG at Ijegun was dispensing at N1,354 per litre.
The latest increase followed Dangote Refinery’s fourth upward review in 22 days. The refinery had moved its PMS gantry price from N1,165 to N1,185 on August 21, to N1,200 on August 26, N1,265 on August 29 and finally to N1,350 on September 12.
Dangote Refinery President, Aliko Dangote, had defended the increases, saying petrol remained cheaper in Nigeria than in other African countries and assuring that there would be no queues.
But marketers said the increases had left them with little choice but to review pump prices.
Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said marketers were compelled to adjust their prices following the successive increases by the refinery. “Every time Dangote increases his price, our price will also rise,” he said.
Also, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, had warned that pump prices would increase nationwide as crude oil prices rose.
“Refiners, depot owners, marketers and retailers will increase their prices with the spike in crude oil prices,” he said.
The price shock has also been compounded by tight supply conditions in parts of Lagos, with more than 30 depots and jetties reportedly vacant while fewer than 10 tracked depots were carrying products, according to Petroleumprice.com, an online petroleum products tracker.
Among the facilities listed as empty were New Atlas Cove Jetty, HEYDEN Ijora, Integrated and Rainoil Ijegun.
Earlier last week, several depot owners in Coconut, Satellite Town and Dockyard withheld sales as the landing cost climbed to N1,311 per litre, with operators reluctant to sell below replacement cost.
The impact has already begun to spread across the wider economy, with transporters increasing fares by between 20 and 30 per cent on some major Lagos routes.
Commuters on the Ikorodu-CMS and Oshodi-Berger corridors were among those worst affected, while traders said food and other commodity prices were also rising as logistics costs increased.
Motorists, Commuters Groan in Delta
Motorists and commuters in Delta State are also facing increased hardship following the latest surge in petrol prices, with the product now selling for between N1,350 and N1,500 per litre in Warri and surrounding areas.
THISDAY observed yesterday that retail pump prices in Warri and environs ranged between N1,350 and N1,500 per litre.
Similar prices were recorded in Sapele, Ughelli, Udu, Orerokpe, Isoko and their environs, while filling stations in more remote locations were selling at as much as N1,500 per litre.
Comparable rates were also recorded in Agbor, Asaba and Okpanam in Delta North Senatorial District.
NNPC retail stations were selling at around N1,375 per litre, representing the lowest price observed in the area, while private filling stations were dispensing at between N1,400 and N1,450 per litre.
The increases have forced commercial transport operators to review their fares, further worsening the burden on commuters.
Kano Residents Abandon Vehicles, Resort to Trekking
Residents of Kano are also groaning under rising petrol prices, with pump prices climbing to between N1,450 and N1,470 per litre across the metropolis.
A market survey conducted by THISDAY yesterday showed that major marketers, including A.A. Rano and Aliko A.Y. Maikifi, were selling the product at N1,450 per litre, while independent marketers such as Kokiya and Idi Abbas filling stations were dispensing at N1,470 per litre.
Despite the high prices, most filling stations visited in the city had few or no buyers, as many motorists appeared unable or unwilling to purchase petrol at the new rates.
Several stations along Ibrahim Taiwo Road, Zoo Road and Maiduguri Road were largely deserted, with attendants seen sitting idle and waiting for customers.
The development forced some residents to abandon their private vehicles, resulting in a noticeable decline in vehicular movement across major roads in the state capital.
Commercial tricycle operators, popularly known as Keke Napep, are also counting losses as residents increasingly resort to trekking in an attempt to cut transportation costs.
“Before, I used to make N14,000 daily, but now I hardly make N7,000. People no longer board Keke, they prefer to trek even long distances,” a Keke operator at Bata, Habibu Musa, told THISDAY.