After weeks of speculation during which queues built up at filling stations, the price of petrol has shot up.
The NNPC Retail Management announced an upward review of the price from N617 per litre to N897 per litre effective September 3.
This price hike of N280 per litre appears to be the major outcome of the recent #Endbadgovernance protest, albeit in reverse direction to what was demanded. Apparently in choreography, the trial of protesters caught by security agents started simultaneously.
Now, Bola Tinubu has bared his fangs and has pointed in the direction of those he became president to serve.
The Nigerian Labour Congress (NLC) president, Joe Ajaero, said in reaction that the government had shown bad faith in hiking the commodity price. He disclosed that organized labour had agreed to a N70,000 minimum wage the other day, based on the premise that the government would not raise petrol price again. But barely had the ink dried before the government returned to tightening the noose on this commodity that drives the economy. He said the appropriate organs of the union would meet and take decisions on this – a hint at a possible strike.
Tinubu, however, is a master of the strike and civil disobedience game. Since the days of President Olusegun Obasanjo, the government aiming at a 100 percent rise in fuel price would announce a 200 percent hike. Labour would go on strike and negotiations would follow (with cash exchange, many suspect) following which a 100 percent hike would be announced as the negotiated price – just what the government wanted ab initio.
Tinubu is therefore not worried about the coming game. He will exit with either his original intent or better. Many adult Nigerians know this predictable game too, and have learnt not to put much trust in it. So, it’s likely to be a continuous roll of Tinubu’s tank which no musket can stop. Isn’t it?
We must live with it, it seems. And if you dare whimper, the police, which has been moulting into Hitler’s Gestapo since the #Endsars youth revolt of 2020, is there to teach you a lesson. Apparently, their wives and relatives buy their food from a different market, not this one that runs on over 40 percent year-on-year inflation that is available to the rest of us.
So while conceding victory to Tinubu before the fight, let us get acquainted with the incipient scenario. While the NNPC approved pump price was N617/litre, petrol was sold to us at N850 to N900/litre. We paid a premium of about N270/litre. By extrapolation, we shall be buying petrol at about N1,270/litre by the time the new price settles. The new minimum wage will buy just 55 litres of petrol – one full tank.
And what can we buy by the time the knock-on settles in the prices of other goods and services? What would our purchasing power be like? The government had crowed that headline inflation dropped from 34.19 percent in June to 33.40 percent in July. The figures for September will be interesting, if the government doesn’t resort to cooking figures. Whatever the figures show, certainly there will be less food on the tables; more children will suffer acute malnutrition and school enrollment figures will keep dropping. More workers will drop off employment as small and medium enterprises shut down from the double whammy of a 250 percent hike in electricity tariff and a 45 percent spike in cost of petrol. It’s like the devil came to town.
Of course, a lot more people will drop the cars they had bought in saner times, unable to fuel them now.
I don’t know a single sector of the economy that would benefit from this fuel price hike. Even the sellers of petrol will sell less. The nation’s gross domestic product stands to shrink as a result of this.
Riding the nation’s roughshod has become the hallmark of Tinubu’s government. It has worked so far, and will still do some more. But someday, a surprise may upstage the complacency that has built up. And the snobbishness may come to a sorry pass. Till that day.
Dangote to the rescue?
On the very day that the government, through the NNPC announced a spike in petrol price, another very significant development took place concerning the same commodity. Dangote Refinery announced that it had started the production of premium motor spirit (PMS) and was ready to supply the demand of the nation.
Aliko Dangote personally made the announcement to the media at the refinery site. Was that coincidence or choreography? Difficult to say. Just a few weeks ago, the NNPC was in the trenches fighting Dangote. The state behemoth wouldn’t sell crude oil to Dangote, and when it was forced to do so, it insisted on dollarized transactions for a commodity extracted within Nigeria. Not done with that, the inspectorate arm of this state regulator embarked on a demarketing of Dangote products, which it described as substandard.
Alhaji Dangote personally came out to defend the integrity of his product and defend his precious investment. He mobilized the support of most Nigerians who saw the crass injustice being meted out to him as well as the potential for the refinery to solve the irony of shutting down Nigeria’s refineries so that the political class will keep importing refined fuel at exorbitant prices.
Dangote secured President Tinubu’s direct intervention. Tinubu ordered NNPC to sell crude to Dangote in naira, while Dangote sells petrol to dealers in naira too.
On the face of it, both Dangote and Nigeria won. In his speech to the media, Aliko Dangote thanked President Tinubu for this very policy, which he said would save some 40 percent of Nigeria’s foreign exchange demand which goes for fuel importation. Selling the commodity in naira, he added, would help strengthen the currency.
If what has happened between Dangote and the NNPC is rapprochement, it would have a place in the records. How long it lasts will be another matter.
In the meantime, those who believe in the miraculous save from the precipice should shout only a muted hallelujah. While Dangote has assured the supply of petrol, another major issue is pricing.
Dangote washes his hands on this one. “Pricing is controlled by NNPC. For now, we focus on ensuring that the products are available—that’s what I can guarantee,” Dangote said.
Ojukwu-Enendu is a former newspaper editor, and can be reached through: [email protected]
