By Livinus Nnebedum
Impact on our economy: High fuel prize, high transport cost and high cost of living accompanied with worsening massive unemployment among youths and other burning national issues, problems and concern are causing serious havoc in Nigeria economy today. Fuel crisis is coming back to stage. Can we stop it? If not the already existing Food crisis, Economic hardship and social vices etc can bring more havoc into the economy. These boiling issues had catapulted into Serious Economic hardship.
There is need to provide job opportunities and massive youths employment by the three levels of government namely Federal Government, State and Local Governments. The Non-Governmental Organization (NGO’s) including private Establishments can assist to reduce unemployment situations across the country. There is need to re-visit, re-view and reduce fuel prize which will eventually and virtually boost all Economic activities of this Nation. During the peak period of lock-down because of corona-virus in March/April 2020, there was little reduction in fuel prize from ₦145 to ₦125 per litre. As of March, 2022, it is hiked to the extent that the petrol is being sold at between ₦190 and ₦250 per litre. This is a big burden. It is like adding petrol into already burning fire instead of adding water to stop the fire from further burning and spreading to other unaffected areas. Let us stop spreading hunger but instead spread “Food Buoyancy” and “Food Banks” and ensure “Food Security” and “Food Self-Sufficiency” for the over 230 Million Nigerians.
Pricing and subsidy on Petroleum Products became an issue from 1st October, 1973 when government introduced uniform pricing policy. The objectives of subsidizing should generally be to aid the poor, stabilize prices, and promote economic growth among other factors. But the experience of frequent shortage of products and wide variation in prices across the country seem to suggest that the policy has not been effective and that the subsidy hardly reach the target groups. Thus only limited locations enjoyed the products at the official prices. It is good to look
back at the different prices increase of the petroleum products by past
Administrations from 1966 through 1973 to date. The prices of petrol [Premium Motor Spirit P.M.S.] in Nigeria are as follows :
DATES & PRIZE OF PETROL
- Jan.1966 to Sept. 1978 (8.8kobo per litre)
-October, 1978 (15.3 kobo per litre)
-April, 1982 (20 kobo per litre)
-March, 1986 (39½ kobo per litre)
-April, 1988 (42 kobo per litre)
-Jan, 1989 (42 kobo for commercial vehicles and 60 kobo for private vehicles per litre)
-Dec., 1989 (60 kobo per litre for all vehicles)
-March, 1991 (70 kobo per litre)
-Nov. 8, 1993 (₦5 per litre)
-Nov. 22, 1993 (₦3.25 per litre)
-October 2, 1994 (₦15 per litre)
-October 4, 1994 (₦11 per litre)
-Dec., 1998 (₦25 per litre)
-Jan., 1999 (₦20 per litre)
-June 1, 2000 (₦30 per litre)
-June 8, 2000 (₦25 per litre)
-June 13, 2000 (₦22 per litre)
-Jan., 2002 (₦26 per litre)
-June 2003 (₦40 per litre)
-July, 2003 (₦34 per litre)
-October 2003 (₦38.50k & ₦42)
-May 29, 2004 (₦49.90k per litre)
-April 2005 (₦65 per litre)
-June 2009 (₦70)
-Jan. 1, 2012 (₦141 per litre)
-Jan. 16, 2012 (₦97 per litre)
-Jan., 2015 (₦87 per litre)
-Jan., 2016 (₦86.50 kobo per litre)
-May 2016 (₦145)
-March 2020 (₦125)
-April 2020 (₦123.50)
-September 2020 (₦160/₦165)
-November 2020 (₦170)
-Feb/March 2022 (₦190 to ₦250)
-May/June 2023 (₦620/₦650/₦720)
-2024 (₦900 to ₦970)
-July 2026 (₦1300 to ₦1400)
It was from 1993 that Nigerians started experiencing persistent fuel scarcity. In those years before 1993, the story of fuel scarcity and subsequent price hike was only noticed occasionally during celebrations like Xmas, Easter and Ramadan or Muslims Festivals. The notorious experience of fuel hikes, scarcity and hoarding was obvious in those past years of 1994, 1995 extending to 1999. The problems of fuel scarcity, price hike and changes was very hot in 1994. The scarcity before the Federal Government (FG) intervention on October 1994 paralysed every sector of the Economy. The FG made a national broadcast in Oct 1994 and took decisive actions on fuel situations but the persistent fuel scarcity was still on as at that period. On October 4, 1994 the prices was pegged at ₦11 per litre for petrol, ₦9 for diesel, ₦6 for kerosene and ₦7 for engine oil.
The World Petroleum Bulletins 1997 and 1998 listed countries in Africa with crude oil deposits and/or refineries as Cote D’Ivoire (Ivory Coast), Egypt, Gabon, Angola, Nigeria, Cameroon, Morocco, Libya, Benin Republic, Tunisia and Algeria. Nigeria when compared with other countries in Africa according to the World Petroleum Bulletins 1997 & 1998, has high petroleum prices despite the fact that crude oil are produced in Nigeria. The price of petrol was ₦18, diesel ₦15 and Kerosene ₦12 per litre in Morocco. In Gabon, it was petrol ₦18, diesel ₦15, and Kerosene ₦12 per litre. But in Nigeria then 1997/1998, it was ₦25 for petrol, ₦19 diesel and ₦17 kerosene per litre.
The Petroleum Equalization Fund (PEF) was established in 1975. The fund was established by Decree 9 of 1975 as amended by Decree 32 of 1989 to ensure uniform pricing system of petroleum products throughout the country. The policy of uniform pricing was introduced to achieve public policy objective of political and economic integration. But how far have these been achieved? Pricing became problematic from 1986 with the introduction of the Structural Adjustment Programme (SAP) and the rapid devaluation of the Naira. Since then, the problem of pricing has been a perennial and vexing issue. Price increases have become traumatic and accompanied by public protests and strikes that had always taken its toll on
the Nigeria Economy. The prices of petroleum products were review upwards in June 2000. The adjustment pushed the pump price of petrol from ₦20 to ₦30. However, there was a reaction led by the Nigeria Labour Congress (NLC) resulting in a nationwide industrial action.
Thereafter, a government negotiating team was set up to dialogue with the NLC team. Following that negotiation, the
Prices of petroleum products were agreed as follows:
Petrol was reduced from N30 to N22 per litre.
Diesel was reduced from N29 to N21 per litre.
Kerosene was reverted from N27 to its original prize of N17 per litre as at that time.
It should also be recalled that in june 2003, the NLC called for nationwide strike starting from Monday 30th June, 2003 because of new hike in prices of petrol.
All the past & present protests and strike resulting from high fuel hike plus other national problems had worsened economics conditions of Nigeria.
Nigeria has been in the period of oil boom for a long time now. It is not too late to diversify our economy so that we don’t depend on monotonous economy. When we remember our “Agricultural boom’” of the 1960s, then we have to pay more attention to agric sector alongside other sectors to boost and encourage SOCIO-ECONOMIC, political and national development in Nigeria.
Livinus Nnebedum, Public Affairs Analyst, writes from Federal College of Education (Technical), Umunze, Anambra State.
