That Cut In Fuel Price

Recently, the Minister of Petroleum Re
sources, Mrs Diezani Alison-Madueke,
took Nigerians by storm when she announced a marginal reduction in the pump price of Premium Motor Spirit (PMS), otherwise called petrol from the official price of N97 to N87 per litre. While making the announcement, the minister said that the new price regime takes immediate effect,  and directed all filling stations across the country to comply by adjusting their pumps in line with the present reality, just as she charged all regulatory agencies, especially the Department of Petroleum Resources (DPR), the Petroleum Products Pricing and Regulatory Agency (PPPRA),  and other agencies of government to intensify monitoring of petroleum products marketers and filling stations to ensure total compliance with the new order.
However, since the announcement of the reduction in PMS pump price by the Federal Government with effect from January 19, 2015, groups, individuals, and very key stakeholders, have continued to voice divergent views on the motive, and indeed, propriety of the decision.
While some welcome the gesture and rationalise that the government appears to be harkening to the yearnings of majority of Nigerians, particularly given the prevailing economic conditions, others think, and vehemently argue, that the reduction in the pump price of PMS by N10 is not proportionate to the huge fall in the price of crude oil in the international market. In fact, the latter group insist that the fall in the price of crude oil should naturally trigger a reduction in the prices of all derivatives of hydrocarbons, including Automotive Gas and Oils (AGO), Dual Purpose Kerosene (DPK), and Aviation Fuels (Jet A and Jet A1), and not just PMS or gasoline.
The Tide completely agrees with both divides. While we commend the government for responding to the new reality by reducing the pump price of PMS, we however, feel that the action did not meet standard procedure, and was therefore, taken hastily, albeit, to score cheap political points.
Our first worry is the fact that the minister had to make the announcement, instead of the statutory body charged with the responsibility of pegging, regulating and monitoring petroleum products prices – PPPRA. The second concern is the failure of government to extend the price cut to other key derivatives of crude oil, such as DPK, AGO and Aviation Fuels. We believe that a reduction in the price of PMS, without a corresponding cut in the prices of kerosene, diesel and jet oils, may not significantly affect the majority of Nigerians, particularly those in the rural areas and low income earners in urban centres, industries and manufacturers, whose economic contributions oil the wheel of development, as well as some key transporters and commuters.
This is why we join other well-meaning Nigerians to call on the Federal Government to take a holistic review of the intervention measure with a view to further cutting down on the prices of all petroleum products across the board. We also think that the review should be done in such a way that no iota of arbitrariness is allowed to permeate the process.
Even so, The Tide is particularly worried that under a regulated petroleum industry, where government regulates prices in consonance with a complex subsidy regime, a drop in the price of crude oil in the international market, resulting in unanticipated intervention of this nature, is not sustainable. We say so because crude oil prices fluctuate, depending on prevailing circumstances.
For us, the current situation provides an ample opportunity for the Nigerian people to rise up and call for the removal of subsidy on petroleum products, thus, allowing market forces determine the prices of the essential products. Besides, a deregulated downstream sector of the petroleum industry would surely open the floodgate for the take-off and operationalisation of new refineries and petrochemicals facilities to add the much-needed value to  the country’s economy.
In addition, a deregulated regime would create millions of new jobs for the teeming population of skilled and semi-skilled manpower, curb, if not stop products importation, as well as eliminate corruption in the industry, thus, saving trillions of Naira frittered away by a band of cabals, among other benefits. We think that this is the right way to go, if the present generation must move Nigeria to the next level.