ECONOMY-NIGERIA: Panic At Fuel Stations After Obasanjo Hints At Price

By Toye Olori Reprint | | Print |

Toye Olori

LAGOS, Jun 18 2003 (IPS) - -Fuel stations in Nigeria have been besieged by queues of consumers in a frenzy of panic buying following the weekend comments made by President Olusegun Obasanjo in which he hinted at a possible hike in the price of fuel.

Commuters in the commercial capital, Lagos, were thrown into confusion as all major roads which have fuel filling stations along them were totally blocked for hours as motorists began queuing in anticipation of the hinted price hike. Many filling stations added to the confusion and panic by shutting their doors while they await the announcement of the new prices in an attempt to maximise on profits.

"I managed to get to the office in two hours instead of the just 45 minutes it would take on a normal day. The whole place was thrown into chaos as vehicles hardly moved in the heavy traffic created by motorists rushing to buy fuel following the pronouncement by the president to increase fuel prices,” said Olu Agbogun a civil servant here.

"I am going to park my car at home until things stabilise. I know that as soon as the price is officially fixed government will pump more fuel into the market and there will be no problem of buying. I cannot stress myself because of a false fuel scarcity," he told IPS.

He blamed fuel sellers and impatient motorists for the situation. "Nigerians are used to turning any situation to their advantage. I do not know why fuel stations have begun to hoard fuel just because the government plans to increase fuel price. This is why many people are panic buying and storing fuel but I don’t know how long the fuel they buy now will last them," he added in frustration.

On Saturday night during a media chat programme broadcast on television and radio, President Olusegun Obasanjo apparently hinted that price of fuel must be increased. He noted that apart from Abuja and Lagos, there is no other city or town in Nigeria where fuel is not sold above 35 Naira (about three cents) per litre instead of the official rate of 26 Naira.

"At the moment, there is no way that NNPC (Nigerian National Petroleum Corporation) can cope with the present price of 26 Naira per litre, so we have to find ways by which we can have availability and regular supply on the dot. You can’t eat your cake and have it," Obasanjo said.

He stated that Nigeria spends about 250 billion Naira (about 2,5 billion dollars) subsidising fuel annually, which, he explained, could be spent on the provision of social amenities such as education, health and agriculture to enrich the lives of poor people.

Increases in the price of fuel have, in the past, been met with stiff resistance from labour and citizens alike who say the move increases inflation and further worsens their plight. They say the justification given by Obasanjo’s for the impending price hike is not a new one and previous administrations had given similar reasons for increasing fuel prices. However, they say, the plight of the ordinary citizens has not improved.

"We have heard this type of reason before but what we have gained at the end of each increase is further impoverishment. I do not think we are better off than we were, inflation is getting higher and yet the government wants to add to our problems,” John Odunfa, a junior civil servant here told IPS.

Analysts predict that the hike in the pump price of fuel may be the first major problem Obasanjo will encounter since his inauguration for a second term on May 29. Transporters last week vowed to hike their fares across the country by 100 per cent if the planned increases in the pump price of petrol is implemented.

The Nigerian Association of Road Transport Owners (NARTO) has accused petrol sellers of already increasing the pump price of diesel by 100 percent in anticipation of government increase. The Association rejected any fresh price increase by government and have warned that such a move would paralyze the road transport business.

Isa Lawan, National Co-ordinator of NARTO, said "transporters have agreed at an emergency meeting held in Lagos to increase their fares by 100 per cent any time government endorses a new price for petroleum products."

"Even at 26 Naira per litre, we operate at great losses. Many of our vehicles have been grounded because of the harsh economic situation. The present price of fuel at 26 Naira must remain but if government goes ahead to increase the price, we shall from that day increase our fare to any part of the country by 100 percent," he warned.

"Increase in fuel price is not an antidote for scarcity. If it is, the problem of fuel scarcity would have been completely over by now. Increasing fuel prices has never solved the problems of fuel crisis in the country," Lawan said.

Femi Falana, a Lagos lawyer and gubernatorial candidate of the National Conscience Party in the Southwestern state of Ekiti, said the action and utterances of President Obasanjo on the fuel price increase were an indication that he was "no longer with the people".

"The proposed hike in fuel prices has clearly indicated that the Peoples Democratic Party-led government has no solution to the nation’s economic problems," Falana said, adding that the president had forgotten that any increase in the fuel price would definitely aggravate the socio-economic situation in the country.

The Nigeria Labour Congress (NLC) says the country’s workers will be the most negatively affected by any increase and has also warned of industrial action by its members should the price hike go ahead.

Reacting to a report by the Petroleum Product Pricing Regulatory Agency (PPPRA) which met with the Trade Union Congress (an umbrella body for all Senior workers in Nigeria) here at the weekend, the NLC said it would continue to oppose any fuel price hike.

Owei Lakemfa, Assistant Secretary General of the NLC, said the PPPRC report was intended to mislead the people on the real position of labour over the matter. "As far as NLC is concerned, it is an emphatic NO to fuel price increases. We are not swayed by the PPPRC argument of steady supply guarantee in the event of a price increase," he said.

"The same argument has been canvassed in the past and it has not change the situation. The Government should not try us over this,” Lakemfa warned in a statement.

The PPPRA was formerly a committee before the recent passage of its enabling law, is the body charged with managing fuel pricing under the Nigerian government’s downstream liberalisation policy. It said the TUC would agree to an increase if the government would guarantee the availability of petroleum products in all parts of the country upon price review; carry out detailed social and environmental impact of the review and devise means of insulating the masses from the vagaries of international oil price politics by encouraging local refining of products.

Nigeria has four refineries which, due to the lack of maintenance, have been unable to produce at full capacity resulting in heavy dependence on importation of refined products. Government is contemplating the privatization of the refineries but petroleum workers have protested against the plan.

Rasheed Gbadamasi, chairperson of PPPRA, has blamed the government’s heavy involvement in the oil industry, especially in the running of the nation’s refineries through the NNPC, for the problems plaguing the downstream industry in the country.

"It is time the government reviewed ownership structure of the refineries to accommodate private participation,” Gbadamosi said. (ENDS/IPS/AF/WA/EC/TO/SM/03)

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