Muhammadu Buhari Says No To Fuel Price Increase

Muhammadu Buhari Says No To Fuel Price Increase


Muhammadu-BuhariNigeria will not increase its gasoline prices, President Muhammadu Buhari told his oil minister and state oil firm head, summoned to his villa last week, sources at the compound said.

Oil Minister Emmanuel Ibe Kachikwu, the head of state oil firm NNPC Maikanti Baru and the entire government have stepped up efforts to keep fuel flowing into Nigeria without repeating the price increase of May and risking civil unrest.

Shortly before the meeting former Nigerian National Petroleum Corporation (NNPC) bosses had said such an increase may be needed.

A steep devaluation of the naira currency has made sales of petrol at government capped prices unprofitable, marketers say. Months of unrest in the Delta region has also cut Nigeria’s oil output and left as little as half the crude available that it needs to swap for refined motor fuel from trading companies.

“Gasoline is the top priority” for NNPC, said one oil industry source who, like many in Abuja was meeting daily with officials in the oil company. The company, and government, the source said, “will do whatever they can” to stop shortages and keep prices stable.

In a statement last week, NNPC’s Petroleum Products Pricing Regulatory Agency, which oversees downstream regulations, said there was “no basis” for price increase fears, and assured the nation of “uninterrupted supply and distribution.”

Nigeria has four oil refineries, but none of them have been able to run consistently enough to provide Africa’s most populous nation with enough gasoline and diesel – despite its historic position as Africa’s largest oil producer, pumping around two million barrels per day.

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That is, before unrest cut output by around a third earlier this year.

Available, affordable gasoline is crucial to the government’s credibility. Shortages bring the nation to a halt, leading to days-long queues for fuel and power cuts at small businesses that rely on generators to withstand frequent power outages.

Nigerian unions have already threatened to take to the streets if prices rise further, as consumers face inflation that is at an 11-year high of 17 percent.

The Independent Petroleum Marketers Association of Nigeria, which represents small and medium fuel sellers, is, however, calling for higher prices. It argues that the current state cap of 145 naira per litre is far too low, given the devaluation.

The currency fell to 420 per dollar on the parallel market last month, compared with the rate of 285 that the government was using when it set the cap.

Gasoline is imported into Nigeria by NNPC and independent importers, with each usually providing half the total needed, but the government said it has been providing some 90 percent in recent months.