…FG may reduce petrol price to N125
By Adewale Sanyaolu, Lagos and Kemi Yesufu, Abuja
AS Nigerians struggle to come to terms with last week’s sudden hike in the price of Premium Motor Spirit otherwise called petrol, the House of Representatives has summoned the Minister of State for Petroleum, Dr. Ibe Kachikwu to appear before it today to explain the rationale behind the adjustment.
Daily Sun findings showed that the lawmakers who are scheduled to resume on Tuesday after a brief break, will hold a special session where Kachikwu is expected to make a presentation by 12 noon.
The minister had on Monday, May 11, announced Federal Government’s approval of an increase in the price from N86/86.50 to N145, a decision which elicited mixed reactions from labour unions and a cross section of Nigerians.
Speaker Yakubu Dogara, in his initial reaction to the increment had assured that the House would not allow the Executive to take any action or decision that would further impoverish Nigerians.
The summon is coming even as Majority Leader of the House, Femi Gbajabiamila called for a review of the national minimum wage to cushion the effects of the price hike.
Gbajabiamila who had opposed the move by past governments to remove petroleum subsidy, said though it was necessary to deregulate the petroleum sector to shield the country from economic downturn, it was also necessary to raise the minimum wage to meet the rising cost of living in the country.
Meanwhile, feelers emerged at the weekend that the Federal Government might slash the price to N125.
Multiple sources at the Ministry of Petroleum Resources and the Petroleum Pricing Regulatory Agency (PPPRA) told Daily Sun that the Federal Government is working on a review of the Petroleum Products Pricing Regulatory Agency (PPPRA) pricing template.
Sources said the move might be proactive measures preparatory to talks with labour unions.
The threat by labour to shut down economic activities by Wednesday should government fail to return to the old price had sent shivers down the spines of the Federal Government, the source said.
Acting Executive of PPPRA, Sotonye Iyoyo, said the review became imperative in the face of extreme difficulties faced by petroleum product importers in sourcing foreign exchange.
In arriving at the new price regime, PPPRA had said a comprehensive study of the costs of importation was undertaken with all stakeholders including marketing companies and independent marketers consulted in arriving at the appropriate cost reflective regime.
This, the agency said, is in furtherance of the price modulation framework rolled out in January 2016 which entails modulating prices down or up on a periodic basis to reflect actual prevailing costs.
Efforts to get the PPRA to shed light on the latest development yesterday failed as several calls to the agency’s spokesman, Mr. Lanre Oladele from 400pm till 6:30pm were not answered.
But a source at the PPPRA said the agency is already working on a template that would eventually bring down the price ahead of a meeting to be summoned by the Federal Government with labour unions.
In drawing up a petrol price template of N125, the source said the agency was considering expunging and reducing some components in the current template which adds to the landing cost of petrol.
There are 14 items under the current PPPRA petrol pricing template divided into two parts; cost elements and distribution margins. Under cost elements, there are ; Cost plus freight(C+F), Lightering Expenses, NIMASA Charge, Financing, Jetty Thru’Put Charge, Storage Charge, Landing Cost. Under distribution charges, there are; Retailers, Transport Allowance, Dealers, Bridging Fund Marine Transport Average (MTA), Admin Charge and Total Margins
“The Federal Government in meeting with labour must come up with a price regime agreeable to both parties. You don’t just call for a meeting without coming up with ‘something to the table’. And it is in this regard, that we are working on a downward review of the PPPRA template, which would be presented to labour at the meeting,’ the source said.
The presidency, in a bold move to mitigate the adverse effect of the new price, will soon begin implementation of the N500 billion earmarked in the 2016 budget for social welfare.
“All together, the Federal Government would be directly impacting the lives of more than eight million Nigerians in different social investment 2016 budget spending that would provide succour and be a ready-made palliative to ordinary Nigerians,” a statement by the media spokesperson for Vice President Yemi Osinabjo, Mr. Laolu Akande in Abuja on Sunday said.
This involved the direct payment of N5,000 monthly to one million extremely poor Nigerians for 12 months as provided for in the 2016 budget for which N$68.7 billion has been appropriated.
Similarly, the government has also made available a direct provision of very soft loan -cash for market women, men and traders, including artisans and Agric workers. This would be for a total of 1.76 million Nigerians, without the requirement for conventional collateral. Some of the traders will likely get about N60,000. A total sum of N140.3 billion has already been appropriated for this in the budget, the statement said.
The details also showed their there would be payment of between N23,000 to N30,000 per month to 500,000 unemployed graduates who would be trained, paid and deployed to work as volunteer teachers, public health officers and extension service workers among other responsibilities. They would also be given electronic devices to empower them technologically both for their assignments and beyond.