The recent increment in the prices of petroleum products and electricity tariff has continued to generate debate. PHILIP NYAM analyses the position of the Peoples Democratic Party (PDP) caucus in the lower chamber of the National Assembly
It is no longer news that majority of Nigerians are angry and agitated over the recent hike in the prices of petroleum products and electricity tariff. Since the announcement of the new price regime, labour unions, civil society organisations, student bodies and opposition political parties, among others have never stopped from criticising the action of the government and are calling for an immediate reversal of the policy, which they have among other termed “insensitive, untimely, inhuman and wicked.” Although the leadership of the House led by the ruling All Progressives Congress (APC) has not made any official reaction since the development, the opposition Peoples Democratic Party (PDP) caucus decided to call out President Muhammadu Buhari for taking such a decision at the time the COVID-19 pandemic has destabilise the lives of millions of Nigerians.
A few days after the National Assembly announced the postponement of its resumption to September 29, the PDP caucus met and took far-reaching decisions to tackle the government at the centre and reechoed the general feelings of millions of hapless Nigerians.
The caucus led by Hon. Kingsley Chinda (PDP, Rivers) urged the president to “as a matter of urgency, reverse the pump price of fuel and electricity tariff to meet the yearnings of Nigerians and realities of the moment.” The call by the caucus was sequel to a resolution it reached at its 18th virtual meeting, where it reviewed issues of national interest particularly, the recent cost increases. The issues that were deliberated at the meeting include increase in the pump price of fuel, electricity, stamp duties, telecommunication charges and implementation of 7.5 per cent Value Added Tax (VAT).
The caucus also discussed worsening security situation in the country, particularly in the North-East, scoring the Buhari administration abysmally. At the meeting, the caucus noted that “the COVID-19 pandemic has no doubted inflicted great hardship globally and have seen most economies fluttering, adding: “Most, if not all responsive governments have devised innovative peopleoriented interventions and opening new frontiers to reducing tax burdens on their citizens to stimulate their economies and cushion the unfortunate effect of the pandemic.”
In a communique issued at the end of the meeting, the caucus observed that “the Nigerian federal government led by President Muhammadu Buhari has found this inauspicious time to implement what can only be described as strangle hold economic policies on the lives of perceived helpless Nigerian citizens.”
The communiqué further read: “More disturbing is the fact that the review in electricity tariff and fuel price is not commensurate with an increase in salary or income of the people.” On fuel price, the PDP lawmakers said that the increase will inflict more pains on Nigerians as it is the third hike since the advent of the APC administration. According to them, “from an inherited pump price of N85 per litre, they have systematically increased it to an exorbitant and strangulating cost of N162 per litre. All these have been achieved without consultation or engagement with the Nigerian people at whose pleasure they are serving.”
They added: “Recall that in 2015, when this government took over the mantle of leadership, cost of crude was between $93.17 and 48.66; pump price of fuel in Nigeria was N85 per litre and about N500 billion was said to be paid as subsidy annually. In 2020, crude sells for $39.68, the pump price of fuel is N162. Ordinarily, lower cost of crude should entail a lower cost of fuel; at every increase, Nigerians are told that subsidy payment has been removed and that price of fuel will be determined by market forces.
“Paradoxically, in 2020 the government budgeted N450 billion for subsidy, whilst the Petroleum Products Pricing Regulatory Agency (PPPRA) gave a realistic estimate of N750.81B to be spent by the Nigeria National Petroleum Corporation (NNPC) as subsidy in 2020, higher than N500 billion even with almost 95 per cent increase in pump price.” Further taking the administration on its promises, the opposition lawmakers said President Buhari also promised to “revive and reactivate our minimally performing refineries to optimum capacity and stabilise oil price.
This is a promise far taller than his imagined economic prowess. The state-owned refineries are operating at a ridiculous fraction of their capacities. Nigeria (an oil-producing country) continues to import more than 90 per cent of her finished products.” The caucus did not also spare the Minister of Information and National Orientation, Alhaji Lai Mohammed, who has been defending the government’s action and justifying the hike by drawing examples from other nations. According to the caucus, “what Lai Mohammed conveniently left out is the “general rule that richer countries have higher price for gasoline, while poorer countries and countries that produce and export oil have significantly lower prices.
The difference in prices across countries is due to various taxes and subsidies they decide to impose.” It added: “The minister didn’t take into consideration the fact that most of these other countries with higher cost have functional and reliable systems in place – public transportation, power and social security for their citizens; their standard of living and minimum wage are far above Nigeria’s; have constant and affordable power supply, and their citizens do not depend on alternative power generation like Nigerians do with generators.”
The group further noted that the minister failed to draw a comparison between the cost of Petroleum Motor Spirit (PMS) in Nigeria and other traditional oil-producing but poor countries. Nigeria sells at $0.39, which is higher than Algeria ($0.36), Angola ($0.26) and Sudan ($0.14). “On what basis then is the comparison made by the minister? More worrisome is that this increase is coming at such a time when, the masses are also faced with a hike in the prices of food, especially the most basic staple food items (rice, garri and yam) yet the government continues to live in self-denial claiming that there is a reduction in the cost of food items.” The lawmakers also took a swipe at the APC-led federal government for increasing the VAT from five per cent to 7.5 per cent.
They lamented that the government rather than alleviate the suffering of citizens chose to gift Nigerians a pre-October 1 gift with an increase in the prices of fuel,electricity tariff and full implementation of 7.5 per cent VAT. On electricity, the caucus recalled that the president on May 29, 2015 said thus: “No single cause can be identified to explain the Nigerian poor economic performance over the years than the power situation. It is a national shame that an economy of over 180 million generates only 4,000mw, and distributes even less.
We will not allow this to go on.” But lampooning the president for failing to fulfill his promise, the PDP House caucus said: “President Buhari unequivocally and unconditionally promised to increase the megawatts generated and make power steady, available and affordable. However, power supply remains epileptic. Even in the face of the poor delivery, he increased the tariff, despite the resolution of the National Assembly that any contemplated increase should be put on hold, consequent upon the unprecedented hardship in the country, compounded by the COVID-19 pandemic.
“The hike in electricity tariff, particularly pushes Nigeria up the cost radar as one of the African countries with the most expensive energy cost. While the average global cost of electricity is between N55.36 and N49.71 for KWh, Nigerians are paying as high as N62.00 KWh. More worrisome is that the adjustment does not guarantee efficient power supply neither is it cost-reflective as most Nigerians continue to pay more for power not consumed through estimated billing.
This is in spite of the fact that the president had said that the hike will be based on the improved power supply.” The group added that despite its capacity to generate approximately, 13,000mw of power, Nigeria’s actual distribution has hovered around 3,000mw and 4,500mw in the past few years. While the PDP lawmakers did not state their next line of action should the federal government fail to heed to its admonition, Nigerians are waiting to see if the will join the labour unions and civil society groups when they file out to protest against the electricity tariff and fuel price kike.