Month: March 2020

The Nigerian Employers’ Consultative Association (NECA) has charged the Federal Government to use present conditions in the oil industry to completely remove subsidy on petroleum products in Nigeria.

Though commending government on the reduction in price of premium motor spirit (PMS), NECA said government should allow the international price of crude to determine the prices of the products in Nigeria, and the template should be flexible to accommodate changes as they might occur.

NECA’s director-general, Dr. Timothy Olawale, noted that it was a welcome development, with the caveat that as Nigeria operates a monoeconomy hinged on oil,  government should ensure a total eradication of the subsidy regime in whatever form.

Olaleye stated that the price of PMS and other petroleum products could have been much lower if the pricing template had been rigorously followed and applied.

He said, “Government should address the issue of subsidy and ensure its total eradication. Energy consumption subsidy is any policy by government that is aimed at reducing the price of energy consumed by citizens relative to what the price would have been in the absence of such policy.

“The regulated price arguably will reduce the consumer price index (CPI) and make it easy to regulate the level of inflation. Subsidy often leads to increased demand for PMS due to over-use and waste arising from reduced price of the product, creating unnecessary shortage of supply.”

The NECA boss urged government to provide leadership and direction in diversifying the economy: “The nation cannot hinge its destiny on the price of a commodity in which it has no control on the pricing.

“It is time to deliberately create a roadmap for rapid diversifying of the economy away from oil. We need actions; the government needs to create avenues for more economic activities to happen like diversifying the tax revenue of the government beyond oil,” he stated.

The NECA DG warned that the shortfall in oil prices should not be a licence to further mortgage the future of the nation with borrowing as the budget is already struggling under the weight of debt service.

source: https://www.sunnewsonline.com/reduction-in-pump-price-neca-calls-for-removal-of-subsidy/

With low oil prices in the international market, the Nigerian government has been quick to throw a token of fuel price reduction at Nigerians. But there is nothing salutary about the decision of the government to intervene yet again and determine the price of petroleum products. Nosa James-Igbinadolor reports

For a government making pretensions to running a free market economy, the terse announcement from the Minister of State for Petroleum Resources Timipre Sylva sounded incongruous and antithetical to the spirit of a market-determined economy.

The minister, on 18 March 2020, had verbosely announced, “The drop in crude oil prices has lowered the expected open price of imported petrol below the official pump price of N145 per litre.

“Therefore, Mr President has approved that Nigerians should benefit from the reduction in the price of PMS, which is a direct effect of the crash in global crude oil prices.

“In view of this situation, based on the price modulation template approved in 2015, the federal government is directing the Nigerian National Petroleum Corporation (NNPC) to reduce the ex-coastal and ex-depot prices of PMS to reflect current market realities.

“Also, the PPPRA shall subsequently issue a monthly guide to NNPC and marketers on the appropriate pricing regime. The agency is further directed to modulate pricing in accordance with prevailing market dynamics and respond appropriately to any further oil market development.

“It is believed that this measure will have a salutary effect on the economy, provide relief to Nigerians and will provide a framework for sustainable supply of PMS to our country.”

Sylva explained that the drop in crude oil prices had lowered the expected open market price of imported petrol below the official pump price of N145 per litre.More in Home

He added, “Therefore, Mr. President has approved that Nigerians should benefit from the reduction in the price of PMS which is a direct effect of the crash in global crude oil prices. In view of this situation, based on the price modulation template approved in 2015, the federal government is directing the NNPC to reduce the ex-coastal and ex-depot prices of PMS to reflect current market realities. Also, the PPPRA shall subsequently issue a monthly guide to NNPC and marketers on the appropriate pricing regime. The agency is further directed to modulate pricing in accordance with prevailing market dynamics and respond appropriately to any further oil market development.”

There is absolutely nothing salutary about the decision of the government to intervene yet again and determine the price of petroleum products. At a banal level, it depicts a caring government attuned to the socio-economic challenges of its citizens, but on a more perceptive plane, it really shows a conflicted government indecisive in taking fundamental macroeconomic decisions and keen on allowing a failed economic policy to keep holding the nation to ransom.

Official figures from the Petroleum Product Pricing Regulatory Agency (PPRA) show that money spent by the federal government in subsidizing petrol is anticipated to gulp a whopping N750.81 billion in 2020. The responsibility of paying for petrol subsidy has been borne for two years on behalf of the federal government by the Nigerian National Petroleum Corporation (NNPC).

This in itself is a major problem as the NNPC has a huge credibility deficit. The 2019 IMF report said of Nigeria’s oil behemoth, “NNPC is self-reporting and its figures cannot be verified or challenged by other government bodies, complicating the validation of information. There are concerns about the accuracy of revenue statements and room for enhancing the level of disclosure, including on what NNPC ultimately considers as net revenue. As highlighted by NEITI, there is significant scope to improve the regularity of NNPC disclosures.”

Petrol subsidy means the government pays petrol marketers for the difference between the regulated price of imported petrol and the Expected Open Market Price (EOMP), estimated by the PPPRA as an import subsidy. This programme is handled through the Petroleum Subsidy Fund (PSF).

As noted recently by BudgIT, with no strategic framework for the removal of the country’s petrol subsidy programme and a population expected to balloon to 398 million people by 2050, Nigeria risks carrying the financial burden of a subsidy programme that could drown out the development of its other sectors over the next 15 years. The organisation goes on to note that “fuel subsidy” deprives the nation of funds needed for critical socio-economic development. For example, the 10 trillion N consumed by the subsidy regime is sufficient to provide 27,000 megawatts (MW) of solar-powered electricity for stable power supply.

As the World Bank posited in its 2015 Nigeria Economy Report No. 3, fuel subsidy has the capacity of incapacitating the country’s ability to save for the rainy day.

The report had warned: “The $35 billion cost of the fuel subsidy during 2010–2014 was a primary reason why Nigeria was unable to accumulate a fiscal reserve in the excess crude account that could have protected the country from the recent oil price shock. Fuel subsidy obligations are expected to reach 18 percent of all government oil revenues in 2015, and, if the current regulated prices are maintained, this is projected to increase to more than 30 percent by 2018.”

The report further went on to note that “in recent years, numerous audits and reports have identified widespread corruption and fraud in the administration of the fuel subsidy, and official petrol imports have substantially exceeded actual consumption. Attempts by the government to crack down on fraud and delay payment of the subsidy have commonly met with severe fuel shortages in the country that also impose high economic and welfare costs on Nigerians”.

For decades, successive Nigerian governments have battled with the demon of petrol price subsidy, yet failed woefully to exorcise the country of the deadly evil. Even though the country is a major oil producer, it imports 91 percent of its daily petrol needs, leaving local prices exposed to shocks from exchange rate fluctuations. Under the Buhari administration, the local currency has consistently and persistently lost its value from N174 to a dollar in the middle of 2015 to N400 in the black market today.

Fiscal policy has remained expansionary and continues to be shaped by developments in the oil sector, rendering the fiscal situation fragile.

Nigeria has long subsidized fuel for its citizens. The cost of the subsidy is high, and economists and the international financial institutions have argued for many years that it significantly distorts the economy. Since the establishment of civilian government in 1999, consecutive presidents have sought to reduce or eliminate the subsidy. But such efforts have been scaled back or abandoned because of deep popular opposition. On occasion, proposals for curtailing the subsidy has led to strikes and serious riots in urban areas, such as Lagos.

Fuel subsidy is very popular because it is the only means by which most Nigerians benefit from the country’s petroleum. It is this placebo effect in which Nigerians see fuel subsidy as their own form of resource transfer from a government that otherwise provides them little or nothing from the current political economy.

With an estimated 37.2 billion barrels of proven oil reserves, Nigeria is one of the world’s largest oil producers. However, the country’s mineral riches have not resulted in a significant improvement in the quality of life for the majority of Nigeria’s citizens, 52 percent of whom live below the national poverty line. In 2019, Nigeria earned about $50 billion from oil and gas sales, thus, the country does not lack the resources to reach its development goals, rather its resources have been utilized inefficiently.

It is this inefficiency characterized by the behemoth called corruption that has kept petrol subsidy standing strong, unable to be dislodged by forces of reforms and rationality.

Kiran Pandey of the Centre for Science and Environment in India in 2019 said, “Nigeria has spent on average N833 billion (about $2.3 billion) a year to subsidize petroleum imports in the past 12 years. The real amount has skyrocketed nearly 5,000 percent and is projected to be at N1.15 trillion.”

Yet, it is not low-income Nigerians who benefit. Expenditure data as reported by the World Bank showed that the distribution of these subsidies is disproportionately concentrated in the hands of the rich. Richer, households spend a larger amount on fuel products, and, consequently, benefit more than poorer households from any universal subsidy on these products. On average the richest 20 percent receive over six times more in subsidy benefits than the poorest 20 percent.

Fuel subsidy largely favours people in higher-income groups as they own cars, run generators more, use more fuel, live in bigger houses and consume more energy. In contrast, the poor often residing in the rural parts of Nigeria, tend to use more charcoal, kerosene, firewood, use less transportation, live in their own small homes, source food from their immediate local and farms. Varied reports by the National Bureau of Statistics on household expenditure supports this view.

Nigeria’s fuel subsidy continues to crowd out other development spending. As reported by Bloomberg, Nigeria spends four times more money subsiding fuel than building new schools, health centre and equipping new science labs. Nigeria’s total allocation for education is about $1.974 billion and it is not much higher for health care. Infant mortality in Nigeria remains unacceptably high at 90.4 per 1,000 live births.

In 2016, it was estimated that only 15 percent of the country’s roads were paved. The $8 billion from the fuel subsidy could help to address some of these issues. This is a no-brainer and certainly neither justifiable nor sustainable.

No doubt, the fall in oil prices occasioned by the coronavirus pandemic and the Russia-Saudi ‘oil war’ provides the government with a veritable platform to destroy the subsidy demon once and for all. The problem, however, is that the government and its agents will likely not take advantage of it to do right to the Nigerian economy and people. The reason is simple; over the years, monies paid as subsidies have become sources of immense wealth to a few who lurk within the corridors of power. Successive Nigerian governments have neither displayed the commitment nor the urgency to effectively end the scourge of fuel subsidy.

The Nigeria Economic Society (NES) Policy brief aptly noted, “Economically-efficient and environmentally-responsive fuel pricing policy has been confronted by two key challenges. In many of the oil-exporting countries, few policy issues pitch good economics against good politics as fuel subsidy.

“First, the entitlement syndrome linked to citizens’ expectation of a share of the oil cake in an economy richly endowed with oil resources and secondly, the political difficulty associated with reconciling the heterogeneity of interests of key stakeholders in the sub-sector. The difficulty facing the elimination of the subsidy trap derives from a coalition of interests that are against efficiency-oriented reform of the sub-sector. They include the powerful petroleum industry labour unions and those who benefit from fuel subsidy payments.”

source: https://www.thisdaylive.com/index.php/category/editorial/

CENTRAL Bank of Nigeria (CBN) has stopped local and international oil companies from selling dollars to the Nigerian National Petroleum Corporation (NNPC).

The apex bank said the move is in line with the its determination to improve foreign exchange supply to the economy as the impact of the Coronavirus (COVID-19) pandemic bites harder on the economy. The country’s foreign exchange earnings have been depleted.

CBN Governor Godwin Emefiele said the new dollar remittance policy will boost local dollar collections.

Breaking the news during an emergency meeting with bank chief executive officers in Lagos at the weekend, Emefiele spoke of the urgent need to improve dollar supply to the apex bank, which has vowed to meet all dollar obligations to correspondent banks from importers.

CBN’s commitment to naira stability is accompanied with new policies and bottlenecks meant to reduce dollar spending and meet critical obligations, including those to correspondent banks on Letters of Credit and other trade obligations.

The dollar is expected to be sold to the CBN at N377 to the dollar; same rate banks are to auction dollars to the regulator.

The CBN will also be granting naira and forex funding to key local pharmaceutical companies for procurement of raw materials and equipment required to increase local drug production in the country.

They are Emzor, Fidson, GSK, May & Baker, Unique Pharma, Swiss    Pharma, Neimeth, Sagar, Orange Drugs, Dana Pharma, among others, hence the need to effectively harness Nigeria’s dollar earnings in the interest of the economy.

Emefiele explained that the primary focus of the bank at this time is preserving confidence, financial stability and support for the economy.

He said: “We are committed to improving forex supply to the CBN, by directing all oil companies -international, and domestic, whether you are in the service industry, or producing, upstream, mid-stream, downstream, or related companies, to sell their foreign exchange to the CBN and no longer to NNPC, for purposes of funding even import of petroleum products, and also new policy on price modulation.”

The CBN had on Friday officially devalued the naira to N380 to a dollar.  The devaluation came after over three years of push from financial market managers, the World Bank and International Monetary Fund for the local currency to be devalued.

Aside devaluing the naira, the CBN also adopted a unified exchange rate, and pushed the official rate of the naira to N376 to dollar for International Money Transfer Operators rate to banks; N377 to dollar for banks’ dollar sale to CBN and pegged CBN’s dollar sales to banks at N378 and limited dollar sales to Bureaux de Change (BDCs) to $20,000 per week.

Emefiele also advised Nigerians to begin prioritising their import needs, and focus more on sourcing raw materials and inputs locally.

Emefiele said: “In deed, there is no choice than to source raw materials locally. From the information available to us, the various lockdowns in different parts of the world, all counties are locking their borders, and making it difficult for even raw materials and inputs to leave their borders.

“So, it means we have no other choice than to look inwards, especially now we can say that those inputs and raw materials can be sourced locally.”

The CBN, in February, introduced new domiciliary account rules in which it directed that customers can deposit dollar into their domiciliary accounts but are not allowed to transfer it to another party.

Also, only electronic fund transfers into domiciliary accounts can be transferred from such accounts to third parties while cash deposits into such accounts can only be withdrawn in cash.

Another policy encourages foreign portfolio investors to invest in high yielding Open Market Operation (OMO) bills at 14 per cent while local investors are restricted.  Foreign holdings of OMO bills (CBN’s investment instrument to control liquidity) account for over $5 billion of the $37.3 billion foreign reserves.

Besides, it restricted importers of milk from accessing foreign exchange from official market. It limited the importation of milk and other dairy products to six firms- FrieslandCampina WAMCO Nigeria; Chi Limited; TG Arla Dairy Products Limited; Promasidor Nigeria Limited; Nestle Nigeria PLC (MSK only), and Integrated Dairies Limited.

According to the policy guideline, all Forms ‘M’ for the importation of milk and its derivatives will only be allowed for the aforementioned companies.

Analysts, insist that these, with the new policy on dollar collections, will help the apex bank harmonise Nigeria’s foreign exchange earnings and meet local and international obligations.

source: https://thenationonlineng.net/cbn-stops-dollar-sales-to-nnpc/

The impacts of Covid-19 have taken a toll on Nigeria’s economy as with others, globally.  Nigeria’s situation, though not isolated, is pathetic given the fact that its main source of revenue,  crude oil, is badly affected, with the resource losing, as at the last count, over $25 on its price, reports Group Business Editor, SIMEON EBULU.

It was Rezia Khan in early February who first sounded the alarm somewhat of dire consequences for the Nigerian economy of the impact ot the Coronavirus pandemic, weeks before it dawned  on the authority that danger was lurking at the corner.  Khan, who spoke in Lagos  on the theme: Nigeria in 2020 -Economic Outlook,  said the Covid-19, which unvleashed its deadly fangs first in China,  has led to the downward review of China’s growth to 4.5 per cent from the previously held forecast of six per cent.

She spoke extensively on the linkage between the events happening then in Wuham, China’s industrial manufacturing hub and its impacts on the global economic sphere. And because the ripple effects of that unfolding development could not be conceptualised, as no one imagined that could get to what it is today, the full weight of its impact on humanity and its devastating effects the economy could not by any stretch of  imagination be fathomed out as it is  today. Nevertheless, she gave some insightful thoughts.

She said the scale down by about 80 per cent of air transportation arising from aviation travel ban to mainland China by major international airlines, with the obvious decline in demand for aviation fuel, as well as the decrease in oil demand arising from severe drop in manufacturing, as well as major factory and business closures and the continuing drop in oil prices (Nigeria’s main revenue earner), are signals that the country’s economy will be in dire straits and at the receiving end.

That obviously is exactly what the situation is now and going from bad to worse. Things have happened so fast as she predicted that there is little or no room for government to address one occurrence before  another sets in. The demand for oil has not only shrank, the price has plummeted. From a high of above $65 per barrel in February, the price has dropped to about $29 per barrel, with fears that it might drop to as low as $15 per barrel. It is not only Covid-19 that is at play here, the ego trip of producing giants such as Saudi Arabia and Russia, is also fuelling the price war, both countries having failed to agree on a production cut at the last Organisation of Petroleum Exporting Countries (OPEC) meeting in Vienna,  has driven Nigeria’s economy into a trap and a cul de sac. Today, Nigeria’s crude is sitting akimbo in the high seas without buyers, and if any, at a price almost at par or below production cost.

Implication

The big question obviously is, what  Nigeria should do, especially in the context of the prevailing weakness in oil price. Expectedly, investors are on edge looking at the direction of the foreign exchange reserves which at the moment do not offer much hope. The challenge of even building the reserves is clearly herculean and with that comes the problem of exchange rate sustainability. If foreign investors get nervous (I’m afraid they already are), and develop cold feet when it comes to investing, or even retaining their existing portfolios in the country,  they might therefore in return demand a higher risk premium from the country. They want to know if they would get a higher return because of the obvious higher and attendant risks. And this could well emerge as something, or a challenge that the monetary authorities will have to look at.

Oil dependency

There are certain peculiarities about the Nigerian economy that when benchmarked against the prevailing Covid-19 pandemic, expose the underbelly of the economy and the danger a mono-economy like ours presents. Firstly, the economy is oil dependent, sadly and most regrettably, everything that is derived from the oil as revenue, is shared wholesale as quickly as it is earned as allocation to all the three tiers of government. It is a matter of conjecture whether anything is left as savings, or invested for posterity. There is the Excess Crude Account (ECA) that ought to act as a buffer, but in the light of the dip in oil prices, even before now, that ECA had since lost its meaning.

The  economy has been hurt over time by dwindling oil prices, this Covid-19 pandemic should present the country a great opportunity for diversification. The reality, Rezia Khan feared,  is that Nigeria hasn’t yet necessarily seen that happening in a strong way.  What is needed, she counseled,  is for Nigeria to move away from oil, stressing the need to be more economically deep outside just the allocation model of the country.

At the last Monetary Policy Committee (MPC) meeting, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele,  called on the Federal Government to cut the Federal Accounts Allocation Committee (FAAC)  allocation, saying it was time to start rebuilding fiscal buffers.  Given the accumulation of higher debt so far, if the country doesn’t get this right, then the risks will be significant. Because unless we start to see much more focus on revenue numbers, revenue growth that is at least consistent with the double digit rate of inflation, as the inflation figures for February have shown (12.02 per cent), then investors may start to worry about the debt matrix, as well as the amount of debt service relative to the amount of revenue that can be collected, and that is very important, Khan warned.

2020 Appropriation

As oil  price continues on its downward slide, Nigeria’s budget of over S10 billion is already a nullity given that it was benchmarked on oil price of $57 per barrel. The Federal Government has already taken notice of that and has taken remedial steps by adjusting its estimates accordingly. The government has consequently adjusted the budget oil benchmark to $30 per barrel from $57, followed by a raft of other measures, including a cap on recruitment of workers. Additionally, President Muhammadu Buhari has approved a N1.5 trillion reduction in the 2020 budget to fit into the present economic realities occasioned by Covid-19.

As the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed puts it at briefing, “government is working on a worst scenario oil benchmark of $30 per barrel at 2.18 million barrels per day.” She said  Buhari has also approved far-reaching measures to face the current economic realities, including a cut on the size of the federally funded upstream projects by N457 billion, reduction of projected revenue from Excise Duty, cut on Capital Expenditure by 20 per cent, reduction of Recurrent Expenditure by 25 per cent, ban on recruitment except for essential services and the review of social investment programmes, among others.

As far reaching as these measures are, she assured of job security for  existing workforce, saying  government was not considering downsising staff, or a cut in the salaries of civil servants.

“What we have done is that we have written every ministry and given them guidelines on how these adjustments will be made to enable us have detailed imputes. The bulk cut is about N1.5 trillion reduction in the size of the budget. And this includes N457 billion from PMS under-recovery,” she said.

On how much it affects the federally-funded upstream projects, the minister said: “It is about 25 percent cut. The exact amount we will work out when we get inputs from the ministries, departments and agencies.”

Recession looms

With the pervading impact of Covid-19, spanning all spheres of human existence, ranging from economy, sports, travels, tourism, communications and energy, among several others, it is almost certain that the economic fortunes of nations will suffer huge losses. The safeguard against this scenario, going forward, is if a miracle happens and a cure is immediately found for Covid-19.

In recognision of this bleak scenario, Mrs. Ahmed has somewhat admitted that recession is not farfetched.  On concerns of the economy slipping back into recession, she said: “Of course we have concerns. This is resulting in about 40 to 45 per cent reduction and also it will affect the states because it means FAAC will be significantly reduced. We are expecting the states to take similar measures to amend the plans that we have made and bring them down to current realities. “It is just a question of deferring some nonessential expenditure so that when things turn, we might actually go back to our plans.”

CBN’s intervention

As part of its developmental function, the CBN has risen to the challenge of Covid-19 pandemic, by providing N1 trillion intervention for businesses and households that have come under the trauma of the pandemic.  Emefiele, said the increase in the  intervention is intended to boost local manufacturing and import substitution  across all critical sectors of the economy.

This is in addition to the N100 billion in loan in 2020, to support the health authorities and to ensure that  laboratories, researchers and innovators work with global scientists to patent and produce vaccines and test kits In Nigeria to prepare for any major crises ahead.

Emefiele said  an Implementation Committee that will action the private sector contribution of N1.5trillion Infrastructure funding and that will link farming communities to markets as agreed at the recently concluded “Going for Growth” Roundtable will be set-up.

Exchange rate adjustments

One of the fallouts of Covid-19 impact was adjustments in exchange rates of currencies at the parallel forex markets. The parallel market dealers had taken advantage of the situation to hike the rates, a development the CBN frowned at and quickly took measures to correct, warning all such perpetrators of the legal implications attendant to such practices.

With Nigeria’s naira official exchange rates fixed by the central bank, these black market operators often deliver a more accurate verdict on the levels of supply, demand and prices. Over the past two days, naira to dollar exchange rates—which have stayed quite stable at around 360 naira to the dollar since mid-2017—have reached 430 naira. One currency trader tells Quartz Africa dollars are literally no longer available even on the black market due to “excessive demand.”

At other levels, high net worth individuals, even accessed the market in search of forex as a store of value and an hedge against a feared devaluation, or depreciation of naira, the local currency.

SOURCE: https://thenationonlineng.net/covid-19-puts-budget-2020-economy-on-edge/

Nigerian  motorists were yesterday startled upon discovering that majority of fuel stations across the country  failed to comply with the directive of the Federal Government  reducing retail pump price of petrol from N145 per litre to N125. President Muhammadu Buhari had on Wednesday approved a reduction in the price of Premium Motor Spirit(PMS), otherwise called petrol in the wake of falling crude oil prices.

The Federal Government also directed the Nigerian National Petroleum Corporation (NNPC) to reduce the Ex- Coastal and Ex-Depot prices of fuel to reflect current market realities.

Announcing the approval for price modulation on Wednesday, the Minister of State for Petroleum Resources, Chief Timipre Sylva, in a statement, also revealed that PPPRA would be doing a monthly guide to NNPC and marketers on pricing, in line with prevailing oil market price.

But twenty four hours after the directive was given  most marketers across the country were yet to reflect the new pump price.

While a few stations in Lagos complied with the directive, others continued to sell at the old retail pump price of N145 per litre, on the pretext that the engineers to adjust the metres were being awaited.

Some managers of the independent retail outlets who spoke to Daily Sun in Lagos, said the directive was too sudden as they had yet to dispense with the old stock of N145 and could not sell at N125 as such would amount to huge losses on their part.

Ironically, the Nigerian National Petroleum Corporation (NNPC) retail outlet on Iju which ought to have taken the lead by selling at the new rate as directed by government failed to comply.

But another NNPC outlet on College Road, sold at the new approved rate of N125.

At other major marketers outlets including Mobil, Conoil, Forte, MRS and Total, compliance level was low as  some sold at the new rate, while others didn’t.

At Enyo fuel station at Fagba bus stop on Iju road, Lagos, consumers bought N145 per litre as at yesterday afternoon.

From the South-East zone, majority of fuel marketers  in Nnewi, Abakaliki and Onitsha failed to comply with the new directive. At Nnewi, Anambra State, fuel marketers refused to adjust their pump to reflect the price cut as they described the decision by the Federal Government as arbitrary.

An independent marketer in the State operating a chain of filling stations across Nnewi and environs, Chief Kenneth Maduakor, said the Federal Government ought to have given marketers advance notice.

Maduakor who is the Chairman and Chief Executive Officer of KM Oil and Gas Limited, was visibly angry as he queried the rationale behind the Federal Government’s decision to crash  fuel pump price without putting into consideration what would be the plight of the dealers who had just replenished their stock a day or two before the pronouncement.

Dealers in Ebonyi continued to sell fuel at price N145/ liter defying government’s new pricei

Filling stations in Abakaliki, Ebonyi state and its environs were yet to adhere to the new pump price of Premium Motor Spirit (PMS) as approved by the Federal Government.

However, a visit to some of the  filling stations located in Abakaliki on Thursday showed that fuel stations in the state  were still selling at the old  price of 145 naira per liter.

Our correspondent visited  Mobil filling Station, Ogoja Road, Jessco Filling Station Afikpo Road, Harris Filling Station Enugu-Abakaliki express road and Total Filing station Ogoja Road among others only to discover they were all selling at N145  per liter.

A fuel dealer in the state who pleaded anonymity told our correspondent that they could not sell at the new price since  they bought a higher depot price.

He said selling at the new price will affect them since the product they have were purchased at the rate of 145 naira per liter

He said, “we can not sell at 125 naira per liter now because what we have is old stock. We did not buy at that amount. There will be great loss for us  if we sell what we bought at N145 for N125. We are not saying that we are not going to sell at N125, but that would be after selling our current stock. A tricycle operator who spoke to Daily Sun however applauded the Federal Government for the reduction of fuel price, adding that  it will  reduce the cost of goods and services.

The operator who gave his name as Uguru, however said government should not stop at approving the reduction alone, but should also enforce the new price.

He said: ‘’I like the reduction. But it does not end there. As you can see no filling station is selling at N125 now. And they will not do so until they are forced. So government has to force them to sell at the new priceof N125, if not,  it will just be on paper and on radio without people enjoying it’’

In Awka, the Anambra State capital, many filling stations were yet to adjust to the new price regime announced by the Federal Government.

At Femas Filling Station on the popular Aroma Junction, fuel was being sold at the  old price of N145.

One of the attendants, when asked why the station has not adjusted to the new price, simply said that she had no idea of any price change.

“We are still selling at N145” she told Daily Sun even as she moved on to attend to a buyer.

At NIPCO Filling Station in the same Aroma Junction along Ifite Road, fuel was still sold at N145 as at the time of filing this report.

A female pump attendant who spoke to Daily Sun simply said that the station still uses old pump price.

When Daily Sun visited Sinai Oil and Gas at the popular UNIZIK Junction along Enugu–Onitsha Expressway, the story was the same. A staff of the station retorted when this reporter asked why the station still sold petrol at N145.

“Do you think that change of price is possible in Anambra State? The same government that changed price will still come here and collect bribe. “They will still come here to look for something that will be given to them. There is corruption in this country”, she regretted.

The pump attendant utterances suggested that the management of the station would be willing to abide by the Federal Government’s directive but would be deterred by certain factors.

SOURCE: https://www.sunnewsonline.com/n125-fuel-price-low-compliance-trails-fgs-directive-across-states/