NNPC okays subsidy on petrol
By Yakubu Lawal and Yetunde Majekodunmi (Lagos), Charles Coffie Gyamfi (Abeokuta) and Charles Ogugbuaja (Owerri)
THE Nigerian National Petroleum Corporation (NNPC) has effected a slash in the cost of petroleum products as agreed by Labour and representatives of the Federal Government.
The corporation's Group Managing Director (GMD), Mr. Funso Kupolokun, confirmed the development in a statement issued yesterday in Abuja.
To enable the marketers accommodate the price cut, the NNPC has reduced the ex-depot price of petrol to about N39 per litre and N38 per litre for Kerosene.
As at yesterday, the marketers were yet to obey the new order on the products' prices. The directive staved off a planned national strike to protest high fuel prices in the country.
Kupolokun stressed that after the agreement between the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Senator Ibrahim Mantu-led Palliative Committee on Monday, the NNPC had adjusted its ex-depot price as appropriate.
The NNPC boss noted that it usually takes about three weeks for any drop in crude oil prices to have effect on the domestic market. He pointed out that as at early this week, a tonne of refined oil in the international market was about $407.00.
"By the time you use the exchange rate, add the cost of freight, insurance, marketers' margin and other cost elements, the actual price will be N53 per litre. This is to demonstrate the N4 a litre subsidy we are talking about," he stated.
Kupolokun said: "With respect to PMS, even with the current fall in crude oil prices, unrecovered cost in the supply of the product is about N4.00 per litre."
He added: "Until crude oil and product prices slide further downward, cost recovery will not be attained."
Kupolokun, who described the financial position of the NNPC as deplorable, said that the corporation would continue to provide qualitative services to the nation in a deregulated environment where products are readily available and the consumer has a variety of service stations to patronise.
At the international crude oil market, oil prices fell yesterday to about $40 a barrel, from $46 of Monday.
Kupolokun said that the NNPC is still bearing the burden of the subsidy, adding, however, that the necessary discussions with the Ministry of Finance had not begun.
The NNPC boss explained that the palliative committee planned to establish a modulating mechanism that would be self-regulatory and beneficial to the masses.
He stressed that the deregulation policy of the government is still on course, noting that for the policy to work, there is no need to start fixing the prices.
Kupolokun disclosed that the Port-Harcourt refinery is currently refining about 3.5 million litres of fuel per day while Kaduna is producing 1.5 million litres. He, however, added that although Turn Around Maintenance (TAM) of the Warri refinery had been complete, it could not process crude oil due to the vandalisation of the Shanomi creek pipeline which supplies the product to the plant.
According to him, the same fate affects the supply of imported crude to Kaduna refinery, which processes about 50,000 barrels of the 110,000 barrels installed capacity.
The Memorandum of Understanding (MOU) signed on Monday stated that the new price level would be in force until the end of January 2005.
As at yesterday, most filling stations were yet to effect the new pump price of N49 per litre of petrol.
At Mobil along Kirikiri Road, Olodi-Apapa, a litre of petrol sold for N52.50 kobo. One of the station's supervisors who refused to disclose his name told The Guardian: "We major marketers don't adjust price. It is only when we receive directives from Mobil headquarters that the pump price can be adjusted. We are waiting."
Texaco in Olodi-Apapa did not open for business when The Guardian visited at 10 a.m. yesterday.
A petrol attendant at the station said: "We have no fuel. It is finished."
Total on Herbert Macaulay Road, Yaba sold diesel at the old price of N63.50.
Also, fuel stations in Abeokuta, the Ogun State capital yesterday sold fuel for between N51 and N54.
Stations visited included Texaco, Conoil, Fatgbems, Total and African Petroleum (AP) and Oando.
The Texaco stations at Isale Igbein and Omida sold a litre for N52.50.
It was N51 at Fatgbems station at Isale-Igbein and Oando at Ibara Housing Estate.
The Total at Oke-Ikotu while the AP sold for N51. The petrol attendants were not ready to offer any clue as to why they were sticking to the old prices.
Meanwhile, the Lagos State Police Command yesterday expressed gratitude to the Nigeria Labour Congress (NLC) and the Civil Society Coalition for allowing peace to reign by cancelling the nationwide strike scheduled to begin yesterday.
The Lagos Police spokesman, Mr. Emmanuel Ighodalo, a Superintendent of Police, said: "We are grateful to Labour. I do not want to use the word "thankful" for the maturity they used in handling the situation. For giving peace a chance, Labour must be appreciated."
The police in Lagos had on Monday vowed to crush any rally or protest planned by Labour.
According to him, "we were battle-ready for those who wanted to stage a protest or hoodlums who could have taken the advantage of the protest to wreak havoc. But, thank God, there is peace now."
Ighodalo said the peaceful resolution of the problem gave the police less work as, according to him, it would have been a period of unrest for any policeman.
His words: "We are very grateful to stakeholders and we hope that strike action will no longer be used to settle differences between Government and Labour."
Many Imo workers did not report for work yesterday. The Guardian learnt that those who did not turn up for work at the Okigwe and Orlu Road Secretariats in Owerri metropolis complained that they received circulars to proceed on the strike from the NLC, and were yet to be served counter circulars.
The chief press secretary to the Imo State Governor, Bright Nwalue told the people to obey the suspension of the strike by the NLC leaders describing the suspension as positive development for the nation.
Speaking to The Guardian, Nwalue said the state governor, Chief Achike Udenwa, is appreciative of the understanding between the Labour leaders and the Federal Government.
"This is another step in the developmental process and a big plus" he said.
Few school children went to school while some teachers were unable to report for work.
The state chairman of the NLC, Steve Ibe and his secretary, Isdore Opara immediately after the suspension was announced, said that they would get in touch with the national leaders of the congress before making further statements. They expressed joy that there was truce between the parties.
The Imo state police commissioner, Hezekiah Dimka, who said he had despatched his men to handle the situation and ensure peace and order, expressed joy that tension caused by the proposed strike had been defused.
