Subsidy removal:Commuters, motorists groan as fuel sells for N205 – N750 per litre,

AKOR SYLVESTER, Abuja with agency report

Commuters and motorists across Nigeria had difficulties in either getting to their respective destinations or buying fuel sold between N400 and N750 per litre depending on the location of the filling station.

Consequently, most transporters increased both intra-city and inter state fares even as some workers and students who could not afford the new rated had to trek several kilometres to their various destinations.

 

Most filling stations across the state shut down their operations apparently to await the federal government’s next step while long

fuel queues resurface in Lagos, Abuja and other atates where the product was dispensed.

 

Meanwhile, following President Bola Tinubu’s policy statement during his inaugural speech on Monday, on the removal of subsidy, most filling stations in Calabar have shut down while those selling have hiked the price from 210 to 750 naira per litre.

 

Daily Champion also observed that commuters who couldn’t afford to pay N300 per drop from the usual N100 trekked two to three kilometres to get to their offices while only mega stations were selling at N205/ 210 with very long queues.

 

Similarly, those selling black market are smiling to the bank as they have increased their prices to 750 per litre, and are selling only 10 litres per person.

 

In Calabar South, Muritala Mohammed Highway, Marian, Atimbo, and Etta Agbor, no filling station was opened as at the time of filling this report as the few who were selling reportedlu received instructions from their head office to also shut down operation.

 

Hundreds of commuters were seen waiting for the few available taxis at

major junctions and bus stops in Calabar.

 

Fuel price hits N680 per litre in Abia

 

Meanwhile, pump price of Premium Motor Spirit, PMS, is now selling for between N600 and N680 per litre at different petrol stations where the product is available in parts of Abia state.

 

Many filing stations visited by our correspondent which had sold the product on Monday did not open for business Tuesday morning after the newly-inaugurated President Ahmed Bola Tinubu, had declared that the era of fuel subsidy was over.

 

Only few filling stations were observed dispensing petrol in Umuahia, and the few who were selling sold at cut-throat price.

 

Fuel subsidy gulped $10bn in 2022 – Shettima

 

Similarly, Vice President Kashim Shettima has revealed that $10 billion was spent by the immediate past administration of Muhammadu Buhari subsidizing fuel in 2022.

He said the current administration was bent on exiting fuel subsidy because of its negative implications for the country as a whole.

Shettima reiterated his principal’s position on Tuesday, while reporting for duties on his first day in office at the Presidential Villa Abuja.

He said the current administration anticipated that there will be fierce opposition to its decision to remove fuel subsidy.

His words, “The President has already made pronouncements yesterday on the issue of the fuel subsidy. The truth of the matter is that, it is either we get rid of the subsidy or the fuel subsidy gets rid of the Nigerian nation.

“In 2022, we spent $10 billion subsidizing the ostentatious lifestyle of the upper class of society because you and I benefit 90% from the oil subsidy. The poor 40% of Nigerians benefit very little and we know the consequences of unveiling a masquerade.

“We will get fierce opposition from those benefiting from the oil subsidy scam, but where there is a will, there is a way. Be rest assured that our president is a man of strong will and conviction.

“In the fullness of time, you will appreciate his noble intentions for the nation. The issue of fuel subsidy will be frontally addressed. The earlier we do so, the better.’’

 

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‘No going back on fuel subsidy removal’

 

Also Shettima, has stated that the pronouncement made by his principal in his inaugural speech on fuel subsidy removal has come to stay, adding that Tinubu is a man of strong conviction and will.

 

According to him, the new administration is fully aware of fierce opposition from those who benefit from the fuel subsidy scam, adding that the President is prepared for it.

 

Meanwhile, President Bola Tinubu on Tuesday arrived at the presidential villa, Abuja to resume his duties barely 24 hours after his inauguration.

 

His motorcade arrived at the main entrance of the president’s office at about 2.30pm where he inspected the customary guard mounted by Quarter Guards.

 

He, thereafter, took a short drive to the forecourt of the office where he was received by a welcome party led by Vice President Kashim Shettima.

 

Also present were the Speaker of the House of Representatives, Femi Gbajabiamila; the Permanent Secretary of the State House, Tijjani Umar;  the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele; the Group Chief Executive Officer (GCEO), Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari; former Lagos State Commissioner for Finance, Mr Wale Edun, Mr Dele Alake; Hon. James Faleke.

 

Tinuba had been scheduled to have a meeting with the CBN governor and  the NNPCL boss.

 

Vice President Shettima, who also officially resumed at the presidential villa, while speaking to reporters at the Vice President Wing, stated that the new government will change the life of the common man.

He said, “To paraphrase the late John F. Kennedy, to some generations much is given; to other generations much is expected.  I believe this generation has a rendezvous with destiny and my principal, Asiwaju Bola Ahmed Tinubu, the President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria is poised to redefine the meaning and concept of modern governance.

“I want to assure Nigerians that he is going to provide the lead.  He is going to provide the leadership and we will rally round him, give him our unequivocal support and loyalty to see to the realization of the Nigerian dream – a Nigeria where every black man in the world should be proud of.

“Power to me is a humbling experience.  It’s all about how we can make life better for the common man.

“We do everything possible to supply quality news and information to all our valuable readers day in, day out and we are committed to keep doing this. Your kind donation will help our continuous research efforts.

 

Meanwhile, queues for fuel remerged in parts of Abuja and Lagos shortly after President Bola Ahmed Tinubu declared the removal of petrol subsidy.

He said: “On fuel subsidy, unfortunately, the budget before I assumed office is that no provision is there for fuel subsidy. So fuel subsidy is gone”.

Soon after, it was observed that some filling stations visited in Lagos and Abuja were closed while others that dispensed petrol had large queues of cars and people, lining up to fill their tanks and kegs.

A Satellite Town-based filling station, BlocOil, in Lagos, had customers who were seen waiting their turn to buy the product.

Another similar scenario played out at a branch of TotalEnergies in Alakija, where a larger crowd was seen, with the queues already spreading to the road as of the time of filing this report.

Peridot filling station, at Festac link road, also housed vehicles which owners wanted to fill their tanks.

Mobil, MRS, and Techno oil filling stations in Festac Town, on 23 Road, 22 Road, and 1st Avenue, respectively; were closed.

A branch of Nipco filling station in Abuja, located on Kada Road, and Mobil filling station in Mabushi, vehicular queues were seen stretch onto the roads, in efforts to buy petrol.

In Ogun state, the situation appeared more gloomy as it was observed that from Arepo to Mowe, only three, out of over 20 filling stations on that stretch, were willing to sell the commodity.

Long queues were seen at Asharami, Satellite filling stations in Ibafo and Mowe.

A resident who preferred anonymity revealed that most filling stations decided to stop selling when they were informed of Tinubu’s speech on petrol subsidy removal.

 

According to a resident: “Some of the fuel stations only heard about the subsidy removal and just stopped selling.

“They could have at least waited for the new president to fully resume work before acting”.

 

Reps hail Tinubu on subsidy removal

 

Similarly, the House of Representatives has commended President Bola Tinubu for his decision to remove subsidy on petrol.

 

The commendation was sequel to the unanimous adoption of a motion of urgent public importance moved by a member of the House, Jimoh Olajide (APC/Lagos), at the plenary on Tuesday.

 

 

Don’t  dare the people, it could be a costly gamble, NLC warns

 

Also the Nigeria Labour Congress (NLC), has expressed outrage at the pronouncement of President Tinubu removing ‘fuel subsidy’ without due consultations with critical stakeholders and without putting in place palliative measures to cushion the harsh effects of the subsidy removal.

 

Congress said it is strongly opposed to the decision and therefore demanded an immediate withdrawal of the policy.

President of the NLC, Comrade Joe Ajaero, who disclosed this in a statement he personally signed on Tuesday, noted that within hours of President Tinubu’s pronouncement, the nation went into a tailspin due to a combination of service shut downs and product price hike, stressing that in some places representing over 300 per cent price adjustment.

 

He said that by the insensitive decision, Tinubu has brought tears and sorrow to millions of Nigerians instead of hope on his inauguration day, adding that the implications of the decision are grave for the nation’s security and well-being.

Ajaero noted that the new president has equally devalued the quality of the people’s lives by over 300 per cent and counting.

The NLC advised Tinubu to respect his own postulations and economic theories instead of daring the people, stressing that the decision could be a costly gamble.

According to him, “It is no heroism to commit against the people this level of cruelty at any time, let alone on an inauguration day. If he is expecting a medal for taking this decision, he would certainly be disappointed to receive curses for the people of Nigeria consider this decision not only a slight but a big betrayal.

“We wonder if President Tinubu gave a thought to why his predecessors in office refused to implement this highly injurious policy decision. We also wonder if he also forgot the words he penned down on January 8, 2012 but issued on January 11, 2012.

“We have chosen to reproduce substantial parts of the statement for the benefit of those who did not have the opportunity of reading it then,” he said.

 

“As Nigerians gathered with family and friends to celebrate the New Year, the federal government was baking a national cake wrapped in the scheme that would instantly make the New Year a bitter one.

“Barely had the public weaned itself from last year when government dropped a historic surprise on an unsuspecting nation. PPPRA issued a statement abolishing the fuel subsidy. By this sly piece of paper, the federal government breached the social contract with the people. This government….has turned its back on the collective will. By bureaucratic fiat, government made the most fateful economic decision any administration has made since the inception of the Fourth Republic and it has done so with an arrogant wave of the hand as if issuing a minor regulation.

“Because of the terrible substance of the decision and the haughty style of its enactment, the people feel betrayed and angry.

“At this moment, we know not to where this anger will lead. In good conscience, we pray against violence. Also in good conscience, it is the duty of every citizen to peacefully demonstrate and record their opposition to this draconian measure that is swiftly crippling the economy more than it will ever cure it.

“By taking this step, government has tossed the people into the depths of the midnight sea. Government demands the people swim to safety under their own power, claiming the attendant hardship will build character and add efficiency to the national economy. It is easy to make these claims when one is dry and on shore. Government would have us believe that every hardship it manufactures for the people to endure is a good thing. This is a lie. The hardships they thrust upon the poor often bear no other purpose than to keep them poor. This is such a time…..

“Though someday, Nigeria will have to remove the subsidy, the time to do it is not now. This subsidy removal is ill-timed and violates the condition precedent necessary before such a decision is made. First, government needs to clean up and throw away the salad of corruption in the NNPC. Then, proceed to lay the foundation for a mass transit system in the railways and road network with long term bonds and fully develop the energy sector towards revitalizing Nigeria’s economy and easing the burden any subsidy removal may have on the people.

“But we know this is about more than the fuel subsidy. It is about government’s ideas on the role of money in bettering the lives of people, about the relationship between government and the people and about the primary objective of government’s interaction in the economy. It is about whom, among the Nigeria’s various social classes, does government most value.

“This is why public reaction has been heated. It is not so much that people have to spend more money. It is because people feel short-changed and sold out.

“What this government claims to be economic decisions are essentially political ones. As there is progressive politics, there is progressive economics. As there is elitist politics, there is elitist economics. It all depends on what and who in society government would rather favor. The Jonathan tax represents a new standard in elitism.

“This whole issue boils down to whether government believes the general public is worth a certain level of expenditure…

“However, because the distance between government and the people is far and genuine level of affection is low, government sees no utility in continuing to spend the current level of money on the people. In their mind, the people are not worth the money.

“Government sees more value in “saving” money than in saving the hard-pressed masses…

“If government thrashed the fuel subsidy based on considerations that it will run out of naira then it based its decision on a factor that have not been relevant since the time of the Biafran war.

“…Since In a fiat money system, the problem with the fuel subsidy is not impending insolvency as the government asserts. The serious constraint is inflation. Here we must ask whether the payment is so inflationary as to distort the economy. We have been making the payment for years and inflation has not wrecked the economy. This historic evidence refutes the imminent disaster claimed by government.

“In advancing the argument that subsidy would lead to imminent bankruptcy, government reveals its lack of trustworthiness on important matters of fact….

“Nigerians have a collective stake in the ownership of our oil resource held in trust by the government of the day. What we need then is the effective management of this scarce resource that will beget long term prosperity to the suffering people of Nigeria and not the present racket in which those in power abuse access and control of NNPC and oil revenue to warehouse money to fund their election campaigns.

“This brings us to another inconsistency. On one hand, government states the expenditure is unsustainable yet on the other it claims the amount now earmarked for the subsidy will be used to fund other people-oriented programs. However, the two assertions cannot exist at the same time. If the subsidy is bankrupting us, then reallocating funds to different programs will be no less harmful. A bankrupting expenditure retains this quality whether used for the subsidy or another purpose. Earmarking the funds to something else will not change the fiscal impact. If government is sincere about using the funds for other programs, then it must be insincere about the threatened insolvency.

“The concern about government saving naira is purely superfluous. Officials cry that Nigeria will become like Greece. Those who say this disqualify themselves from high office by their own words. Greece sits in a terrible situation because it forfeited its own currency. Thus, it cannot print itself out of insolvency and it must save or earn euro to pay its bills. Because Nigeria issues its own currency, it does not face the same constraint. Again, Nigeria’s problem with the subsidy is not insolvency. Therefore, to go from subsidy to nothing is not wise economics for it “saves” government nothing. What it does is produce real havoc and misery for the majority of the people while the governing elite worship their mistaken fiscal rectitude. Ironically, by acting like the old gold standard fiscal constraints are real, this government will incur the very thing it seeks to avoid. It will subject Nigeria to a crushing economic contraction. The difference between us and the Greeks will be that their situation is the inevitable result of being a weak member in a monetary union dominated by a strong economy, while our downturn will be a discretionary one artificially induced by the backwardness of our policymakers…

“Again, we must rid ourselves of the old notion that government saving and budgetary surpluses are inherently good and that deficits are always bad. For government to save naira, that means it brings in more than it pays out. Where does this influx come from? It comes from you and me, the private sector. If the federal government saves more, it means the private sector will have less. Government surplus means private sector contraction. This shows that the administration has its priorities confused. It acts as if the people are there to help government run itself.

 

“The more beneficial relationship is that government should be giving people the help needed to better live their lives. The government’s position is akin to a wealthy parent demanding his young children bring home more food for him to consume than the parent gives them to eat. We would deride any parent for such meanness. Yet, this government believes this conduct is wise and prudent.

“Another argument government has presented is that removal of the subsidy will stabilize the exchange rate. This makes no sense. True, since marketers convert much of the naira from selling petrol gained into dollars, there is downward pressure on the exchange rate and foreign reserves. However, this pressure is not a byproduct of the subsidy. It is a byproduct of importation. With the subsidy lifted, the marketers will earn the same or more from the sale of petrol. For there to be less pressure on the exchange rate would mean the marketers would seek to exchange significantly less of the same amount of naira into dollars simply because the subsidy was removed. There is no logical basis to assume the new Jonathan tax will have the behavioral impact of causing importers to want to hold more naira. The downward pressure on our currency and reserves will not change simply because the imported items are no longer subsidized. In fact, the higher rate of inflation caused by the removal may make importers keener to change naira into dollars. Thus, the real challenge in this regard is for government to pave the way to increased domestic production.

“There is another “philosophical mystery” in the government’s position. They state the subsidy must be removed to end the unjust enrichment of the importing cabal. There is a major problem with this assertion. If this is truly a subsidy, there should be no unjust enrichment. A subsidy is created to allow the general public to pay a lesser price while sellers earn the prevailing market price. Subsidy removal should not increase or decrease the amount earned per litre by the suppliers. If the amount earned by the suppliers will diminish materially, what government had been operating was in part a pro-importer price support mechanism on top of the consumer-friendly subsidy. If this is the case, government could have abolished the unneeded price support while retaining the consumer subsidy. More to the point, government has failed to show how the system it plans to use will be protected from the undue influence and unfair dealings of those who benefited from the discarded subsidy regime. Because it is capital intensive by its very nature, this sector of the economy is susceptible to control by a few powerful companies. Most of the players will remain the same except that a few cronies of the administration will be allowed entrance into the lucrative game. Sending the economy into the gutter is a steep cost to pay just so a few friends can.

 

“Government claims the subsidy removal will create jobs. This is misleading. The stronger truth is that it will destroy more jobs than it creates. For every job it creates in the capital intensive petroleum sector, it will terminate several jobs in the rest of the labor intensive economy. Subsidy removal will increase costs across the board. However, salaries will not increase. This means demand for goods will lessen as will sales volumes and overall economic activity. The removal will have a recessionary impact on the economy as a whole. While some will benefit from the removal, most will experience setback.

 

“What is doubtless is that the Jonathan tax will increase the price of petrol, transportation and most consumer items. With fuel prices increasing twofold or more, transportation costs will roughly double. Prices of food staples will increase between 25-50 percent. Yet this is more than about cost figures. Most people’s incomes are low and stagnant. They have no way to augment revenue and little room to lower expenses for they know no luxuries; they are already tapped out. The only alternative they have is to fend as best they can, knowing they must somehow again subtract something from their already bare existence.

 

“There will be less food, less medicine, and less school across the land. More children will cry in hunger and more parents will cry at their children’s despair. This is what government has done. Poor and middle class consumers will spend the same amount to buy much less. The volume of economic activity will drop like a stone tossed from a high building. This means real levels of demand will sink. The middle class to which our small businessmen belong will find their profit margins squeezed because they will face higher costs and reduced sales volumes.

 

“These small firms employ vast numbers of Nigerians. They will be hard pressed to maintain current employment levels given the higher costs and lower revenues they will face. Because the middle class businessman will be pinched, those who depend on the businessmen for employment will be heavily pressed. States that earn significant revenue from internally generated funds will find their positions damaged. Internally generated revenue will decline because of the pressure on general economic activity. The Jonathan tax will push Nigeria toward an inflation-recession combination punch worse than the one that has Europe reeling. This tax has doomed Nigeria to extra hardship for years to come while the promised benefits of deregulation will never be substantially realized.

 

“People will starve and families crumble while federal officials praise themselves for “saving money.” The purported savings amount to nothing more than an accounting entry on the government ledger board. They bear no indication of the real state of the economy or of the great harm done the people by this miserly step.

 

“As stated before, the threat of bankruptcy is nothing more than a ghost of something long dead. The real consideration is not whether this sum should be spent but whether it is better spent on the subsidy or on other programs. Nigerians do not need to be wedded to the subsidy. It is not the subsidy that gives life to the social compact; the amount of the expenditure is the better litmus. When attempting to douse popular sentiment, government pretended that the social contract would remain intact because government would spend the money saved from the subsidy on other programs. This would be nice if supported by action. If government were sincere in this regard, it would have used an entirely different strategy…”

 

Nigerians mustn’t suffer inefficiency of past govts –TUC

‘Tinubu can’t unilaterally remove fuel subsidy.

Meanwhile, as the issue of fuel subsidy removal has started telling on Nigerians with the return of fuel queues at the filling stations in most parts of the country, the Trade Union Congress (TUC) has urged President Tinubu to suspend action on the subsidy for now in order to give room for robust dialogue, consultation and stakeholders engagement.

The congress said this is necessary until all issues and questions regarding the petroleum subsidy are taking care of and fully resolved.

The President of TUC, Festus Osifo and the General Secretary of the congress, Nuhu Toro, in a statement in Abuja yesterday, said the congress would resist a situation where  Nigerian Workers and the masses would be made to suffer the inefficiency of successive governments.

The leaders expressed worry in the statement over the silence of the president on the industrial action in education, health and other critical sectors, in his inaugural speech.

The statement reads; “The Trade Union Congress of Nigeria, TUC is delighted by the peaceful transition from the Buhari government to the Tinubu administration and across the 28 states of the federation.

“We congratulate Nigerians and the new administration at all levels even as we urge all those contesting the election results across board to keep following the rule of law as provided in the constitutional and electoral act in seeking redress.

“While listening to Tinubus’s Inaugural Address, we were at first encouraged, by his pledge to lead as a servant of the people (and not as a ruler) and to always consult and dialogue, especially on key and knotty national issues.

“But we were subsequently taken aback, even horrified, when he announced the withdrawal of subsidy on petroleum products, if by this, he means increases in pump price and the exploitation of the people by unregulated and exploitative deregulated prices, then it’s a joke taken too far.

“It is not for nothing the Buhari government pushed this to the new administration, but we expect the Tinubu government to be wise on such a sensitive issue and be more explicit in its pronouncement to avoid contradictory interpretation when comparing his written statement, what he said and the provision in 2023 appropriation act.

“We dare say that this is a very delicate issue that touches on the lives, if not very survival, of particularly the working people, hence ought to have been treated with utmost caution, and should have been preceded by robust dialogue and consultation with, the representatives of the working people, including professionals, market people, students and the poor masses.

“Accordingly, we hereby demand that President Tinubu should tarry awhile to give room for robust dialogue and consultation and stakeholders engagement, just as he opined in his speech until all issues and questions – and there are a host of them! – to ensure that they are amicably considered and resolved. Nigerian Workers and indeed mases must not be made to suffer the inefficiency of successive governments.

“We are also worried that in his speech President Tinubu failed to delve into or reveal his plans on how to tackle and address the issue of poor and unchecked deterioration in industrial relations, particularly in the education, health and judiciary sectors, often resulting in prolonged strike and Industrial actions and their attendant adverse effects on society and the economy. A case in point is the current nationwide strike by JOHESU.

“If there was anything for the administration to hurriedly address from day one in office, it’s the abysmal N30,000 minimum wage that has since been eroded by the problematic monetary and fiscal policies of government”,.

Continuing, the statement said the Labour Movement is open and ready to dialogue with the Tinubu administration on the fuel subsidy issue,  urging it in the interest of the country and its people not to dictate on such a matter or engage in manipulating the outcome of such consultations.

The TUC identified with the new government’s declaration that it will defend the nation from terror and all forms of criminality that threaten peace and stability.

It suggested that in its promised review of the security architecture, a more robust method of defending the country by involving the mass of the people, and empowering them to defend themselves when attacked by bandits and terrorists.

“We also are encouraged by the new government’s promise to engage in job creation, food security and end extreme poverty. In this, we urge it to involve organized labour, employers of labour, professional organisations and the informal sector.

“This is necessary so that these programmes would not become mere propaganda in which unverifiable statistics would be churned out periodically.

“Congress welcomes the promise to make electricity accessible and affordable to businesses and homes and, suggests that the Tinubu government begins by stopping the periodic arbitrary increases in price of electricity imposed by the distribution companies while regulatory and consumer agencies look away.

“This new administration cannot be seen to be speaking from both sides of its mouth, we urge President Tinubu to be a president with human face.

“Like always, we will stand by the people and their interests. Nigerian workers are hardworking and have remained consistent with productive work regardless of harsh government policies, poor governance and mismanagement of resources that have placed us under difficult living conditions”, the statement noted.