Subsidy: Fuel sells N600/litre, queues worsen as filling stations shut - PUNCH
Less than 24 hours after President Bola Tinubu declared an end to fuel subsidy, the pump price of Premium Motor Spirit commonly known as petrol has skyrocketed to N600 per litre from N195/l in many parts of the country.
The development equally triggered a 100 per cent hike in transport fares, while long queues resurfaced at fuel stations across Lagos, Abuja, Ilorin, Benin, Asaba, Port Harcourt, Kano, Makurdi and other major cities and urban areas.
To worsen the situation, many outlets shut down their facilities and refused to dispense fuel to motorists, further creating scarcity and sparking desperation and panic buying at the fuel stations that were opened to customers.
Tinubu had in his inaugural address at the Eagle Square on Monday pronounced with finality an end to subsidy, noting that the 2023 Appropriation Act did not provide for petrol subsidy beyond June; the end of the 18-month extension period approved by the Muhammadu Buhari administration for the discontinuance of the subsidy regime.
The PUNCH reports that the petrol subsidy gulped N6.88trn under the administration of former President Buhari, according to data from the Nigerian National Petroleum Company Limited and the Nigeria Extractive Industries Transparency Initiative.
But taking advantage of the President’s Monday pronouncement, fuel outlets hiked the pump price to the consternation of citizens.
Participants who spoke during The PUNCH Twitter space session on subsidy removal on Tuesday said they bought fuel above the official price.
“I bought fuel at N600/litre at Nnewi, Anambra State today (Tuesday),” a participant who simply gave his name as Chukwuemeka, stated.
Another participant said he bought the commodity at N700/litre in Ondo State as more filling stations gear up for the eventual halt of the fuel subsidy regime.
Meanwhile, queues worsened in some parts of Lagos and Ogun states as transporters hiked their fares while fuel prices went as high as N600/litre at some fuel outlets.
At the Mobil Filling Station at First Gate Bus Stop along the Lagos-Badagry Expressway, fuel wasn’t dispensed even as there was a long queue of vehicles and citizens with jerry cans. The queue extended to half of the expressway.
A commercial bus driver, Adebayo Emmanuel, who spoke to one of our correspondents at 12 noon, said he had been at the station since past 9 am and he had yet to get fuel.
The Peridot station along Festac Access Road was closed, although there were cars parked at its entrance.
The NNPC filling station located at Second Rainbow Bus Stop along Apapa-Oshodi Expressway wasn’t dispensing fuel from any of its four pumps.
Total Energies filling station at Ojota was closed, same as the Mobil station before Otedola Bridge even as Nigerians with kegs set up tents there.
Vehicles could not access the outlet due to the ongoing construction activities on that stretch of the Lagos-Ibadan Expressway.
Meanwhile, the queue for fuel at the North West fuel station, Westex Bus Stop heading toward Gbagada extended almost to Ikorodu Road.
Our correspondent observed that transport fares along the Oshodi-Apapa corridor had increased by 100 per cent, the same as the Oshodi-Ojota-Ketu route.
When one of our correspondents visited some fuel stations around the Ikotun, Igando, and Egbeda axis of Lagos, there were very long queues of motorists.
In Ogun State, one of our correspondents observed that all the filling stations between Akute and Alagbole, including Mobil, Enyo, and two NNPC outlets had been shut down.
In Nasarawa and Niger states as well as Abuja, the queues for petrol at the few filling stations that dispensed products grew worse on Tuesday, as most outlets were shut.
In Calabar, residents woke up on Tuesday to a long line of vehicles at the Dozzy, Fynfield and NNPC filling stations on the Murtala Mohammed highway.
A litre of fuel was sold for N400 with black marketers selling at N800 per litre in some parts of the city.
At the Northwest fuel station, there was a long queue as the attendants said they were awaiting directives on how much to dispense the product.
However, a litre of fuel was sold for N600 in Atimbo, while Fynefield was on Goldie Street where there were long queues in the morning.
Queues also resurfaced at fuel outlets in Ilorin, Kwara state capital on Monday evening.
Findings indicated that some fuel stations in the town opened for business from morning till 2 pm and were selling the product between N189 and N205 per litre.
As of the time of filing this report, only a few stations, including Bovas, Shirafa, and Geri Alimi were dispensing the product.
While Bovas sold fuel at N200 per litre, the Tigress fuel station in the Odota area along Ilorin/Ogbomoso road was selling PMS at N205 per litre.
Many others such as NIPCO, Total, Abanik, OANDO and the NNPC on Asa Dam road were shut.
In Asaba, the capital of Delta State, many stations were besieged by anxious motorists on Tuesday.
Most of the major marketers had hiked their pump prices to N230 and N260 per litre while other stations sold between N450 and N550 per litre
But several outlets refused to attend to customers as their gates were firmly shut.
Niger residents groan
The same situation was recorded in Minna, Niger State where desperate residents lined up at the fuel outlets on Tuesday.
After Tinubu’s announcement on subsidy removal, scores of fuel stations were locked up except the NNPC Mega stations.
In Benin, Edo State, most of the marketers were dispensing fuel between N350 and N520 per litre as panic buying persisted in the metropolis.
However, at the NNPC Mega Station on Sapele Road, the product was sold for N189/litre.
When The PUNCH visited the NNPC Mega Station on Tuesday, the queue stretched from Sapele Road to High Court Road towards the EFCC Office and Protea Hotel.
Paul Osato said he left home very early in the morning and was able to buy at N350 per litre after visiting three fuel stations.
“I got to the filling station so early with the hope of getting fuel but after visiting three filling stations I was able to buy at the rate of N350 per litre. Even before I left, they were already considering how to raise the price after getting information that some stations were selling at N500 per litre.’’
In the Gombe metropolis, black marketers have taken over the streets as they made brisk business selling petrol in jerry cans at N650/l.
The prices hovered between N195 and N250/l at the fuel stations which had long lines.
A resident, Ugo Willie, said, “I went all the way to Doma in search of petrol, from noon to 2 pm because I was in need of fuel. No station was dispensing, they just wanted to create artificial scarcity in the state.”
Katsina State Governor Mallam Dikko Radda on Tuesday night gave independent marketers operating in the state twenty four hours within which to re- open shut fuel stations and start dispensing petrol to motorists.
The governor gave the directive after he had emergency meeting with the independent marketers at Government house,katsina.
He told the marketers that government would resort to force the marketers to start dispensing petrol to the motorists if they fail to comply with his directive.
Governor Radda said the meeting followed complaints that some fuel stations had shut their gates to customers while others had raised the price of the commodity.
The Governor said he summoned the meeting with a view to discussing how people of the state would not suffer untold hardships because of the activities of the marketers.
He solicited for the support and the understanding of members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) to make petrol available for the people of the state.
The IPMAN chairman in the state, Alhaji Abbas Hamza ,in his response,promised the Governor that members of the Association would discuss the decisions reached with the state government during the emergency meeting .
Meanwhile,many fuel stations especially those in the state capital,Katsina shut their gates to customers on Tuesday.
Some fuel stations that opened were however selling fuel at N350 per litre.
In Owerri, the eastern heartland, residents are feeling the pinch as a litre of petrol is being sold between N380, N400 and N450 up from between N235 and N240 per litre.
Our correspondent who monitored the development on Monday evening and Tuesday morning observed that many fuel stations were shut down.
A bus trip now costs N300 from N200 while trips which attracted N100 are now N200.
Tinubu meets Kyari
In response to the fuel crisis, Tinubu met with the Group Chief Executive Officer of the NNPCL, Mele Kyari, Central Bank of Nigeria Governor, Godwin Emefiele and others at the Presidential Villa on Tuesday.
Addressing correspondents after the parley, Kyari declared that the Federal Government could not fund subsidy again, pointing out that the government owed the company N2.8tn that it had spent on petrol subsidy.
“Today, we are waiting for them to settle up to N2.8tn of NNPC’s cash flow from the subsidy regime and we can’t continue to build this,” Kyari told State House Correspondents after meeting with the President.
Affirming the President’s stance, Kyari argued that the subsidy payment was no longer tenable as it made it difficult for the company to fund its core businesses.
He said, “Since the provision of the N6tn in 2022, and N3.7tn in 2023, we have not received any payment whatsoever from the Federation. That means they (Federal Government) are unable to pay and we’ve continued to support this subsidy from the cash flow of the NNPC.
‘’That is when we net off our fiscal obligations of taxes and royalty, there’s still a balance that we’re funding from our cash flow. And that has become very, very difficult and affecting our other operations.
“We’re not able to keep some of this cash to invest in our core businesses. And the end result is that it can be a huge challenge for the company and we have highlighted this severally to the government that they must compensate and NNPC they must pay back an NNPC for the money that we have spent on the subsidy.”
Kyari complained about the federation’s inability to settle the outstanding N2.8trn subsidy bill.
Kyari said the reemerging petrol queues nationwide were understandable as marketers would like to understand the import of the president’s pronouncement that “subsidy is gone.”
He said that the uncertainty over the remark also caused consumers to rush for the product, causing queues.
The NNPCL boss assured Nigerians that the government would initiate measures to cushion the effects of the subsidy discontinuance.
Kyari was also joined by the Chief Executive Officer of the Nigerian Mainstream and Downstream Regulatory Authority, Faruk Ahmed, who said the FG will not place any price cap on the sale of petroleum products in the country.
Admitting that the announcement by the President had triggered queues across filling stations, the oil firm’s boss assured Nigerians that the company had over 30 days of PMS storage and supply, as he appealed to citizens not to indulge in panic buying.
According to him, the company was also in discussions with the Nigeria Midstream and Downstream Petroleum Regulatory Authority “to develop a framework of the implementation of the removal of the PMS subsidy as announced by the President.”
He further added that the company as the supplier of last resort, as mandated by the Petroleum Industry Act, would continue to ensure the availability of PMS and other petroleum products.
Ahmed on his part assured that the government will defend the interest of Nigerians by ensuring that no marketer takes advantage of them and license interested importers.
“With the removal of subsidy as pronounced by Mr President, this has opened the floodgate for any market or company that wants to import PMS. And we are ready to issue licenses for them. At least that will open the competition that will reduce the burden.
“And let me assure Nigerians that the NMDRA and the Federal Competition and Consumer Protection Commission will make sure that consumers are not taken advantage of. We intend to work together on this,” he said.
The NMDPRA stated that contrary to speculations and concerns, the announcement of the President was in line with the Petroleum Industry Act, of 2021, which provided for total deregulation of the petroleum downstream sector to drive investment and growth.
It, however, stated that there was no need for Nigerians to panic, as it was working closely with NNPCL and other key stakeholders to guarantee a smooth transition, avoid any disruption in supply, as well as ensure that consumers were not short-changed in any form.
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It disclosed this in a statement issued in Abuja by General Manager, Corporate Communications, NMDPRA, Kimchi Apollo, as it also stressed that there was an ample supply of PMS to meet demand.
“We have taken necessary steps to ensure distribution channels remain uninterrupted and fuel is readily available at all filling stations across the country,” the downstream regulator stated.
In a bid to assuage the situation, the President said the fuel subsidy removal was not immediately but a process that had been on, noting that the announcement he made during his inaugural speech on Monday will not take effect immediately.
Tinubu in a statement released on Twitter by the Asiwaju Bola Ahmed Media Centre, noted that Nigerians should not resort to panic-buying which had ensued as a result of his speech.
The tweet read, “The public is advised to note that President Bola Tinubu’s declaration that “subsidy is gone” is neither a new development nor an action of his new administration.
“He was merely communicating the status quo, considering that the previous administration’s budget for fuel subsidy was planned and approved to last for only the first half of the year.
“Effectively, this means that by the end of June, the Federal Government will be without funds to continue the subsidy regime, translating to its termination.
“The panic-buying that has ensued as a result of the communication is needless; it will not take immediate effect.”
To assuage the scarcity of fuel caused by hoarding, the Kwara State Governor and Chairman of the Nigeria Governors’ Forum, AbdulRahman AbdulRazaq has cautioned oil marketers to avoid imposing needless hardship on the citizens through the creation of artificial fuel scarcity in the state and beyond.
AbdulRazaq in a statement signed by his Chief Press Secretary, Rafiu Ajakaye on Tuesday said the present situation was uncalled for.
“The governor is seriously concerned about reports of sudden fuel scarcity in different parts of the state, adding that this is totally uncalled for,’’ Ajakaye stated.
He directed fuel marketers to immediately discharge fuel to the public under the normal pricing system since they had bought what they currently have at subsidised rates.
He stated, “The governor urges the marketers to desist from anything that qualifies as economic sabotage of the people. Hoarding fuel bought at subsidised prices and creating panic in the state is opportunistic and will not be condoned. His Excellency the Deputy Governor Mr Kayode Alabi will be leading a task force to ensure that no fuel marketer causes undue hardship to the citizens in Kwara State.
“Fuel stations are to note that the Task Force will dip into their pits. Any filling stations found to be hoarding fuel will have their Certificate of Occupancy revoked, among other penalties.”
In a similar vein, the Ekiti State Governor, Mr Biodun Oyebanji, has also cautioned marketers in the state against hoarding petroleum products, vowing sanction for errant operators.
This was as queues of vehicles surfaced at the filling stations in the state, particularly in Ado Ekiti, the state capital.
Oyebanji said, “Heavy sanctions await any filling station or marketer found hoarding petroleum products or involved in the arbitrary increase in prices of petroleum products in the state.”
The governor issued the threat in a statement by his Special Adviser, Media, Yinka Oyebode, titled, ‘EKSG cautions filling stations, petroleum marketers against hoarding of fuel.’
He urged citizens of the state to go about their daily activities peacefully and avoid any rancorous situation.
Oyebanji counselled the marketers “to await further directives on the implementation of the planned subsidy removal by the Federal Government and avoid actions that are capable of inflicting hardship on the citizens”.
According to him, the Nigeria Governors’ Forum will meet next week over the fuel subsidy.
In a similar move to curtail hoarding, the Osun State Government on Tuesday threatened to deal with those engaging in the practice.
A statement by the spokesperson to the governor, Olawale Rasheed, obtained noted that the hoarding was already causing unnecessary hardship for the people in the state.
Describing the development as inhumane and unpatriotic, the government said it would not allow the situation to persist.
To tackle the challenge, the government recalled that, the “Special Monitoring Team on fuel scarcity set up by His Excellency, Governor Ademola Nurudeen Jackson Adeleke headed by the Chief of Staff, Hon Kazeem Akinleye is still effective and shall not condone any form of economic sabotage.’’
The statement added, “As from today, 30th May 2023, the Committee shall begin special monitoring of all the filling stations across the state in collaboration with law enforcement agencies and other stakeholders.”
Also, the Governor of Bayelsa State, Douye Diri, on Tuesday directed oil marketers in the state against hoarding petrol and raising the price of the product.
Diri, in a statement issued by his Chief Press Secretary, Mr Daniel Alabrah, warned that his administration would shut down any filling station that flouted the directive
Rep commends Tinubu
Meanwhile, the House of Representatives has commended the President on his decision to remove the fuel subsidy.
The commendation was a sequel to the unanimous adoption of a motion of urgent public importance moved by a member of the House, Jimoh Olajide (APC/Lagos), at the plenary on Tuesday.
Moving the motion, Olajide said, ‘’The House is convinced that further legislative actions in supporting Mr President in delivering dividends of democracy will go a long way in enhancing development because he asked for it, he campaigned for it. And he is ready for the task ahead,’ he further stated.
But dissatisfied with the crisis occasioned by Tinubu’s statement, the Trade Union Congress knocked the President over his inaugural speech on Monday.
Speaking at a press briefing in Abuja on Tuesday, the President and General Secretary of TUC, Festus Osifo and Nuhu Toro said they expected the President to be wise with the issue at hand.
Osifo, who read the text of the briefing to journalists described the subsidy removal as a “delicate issue”, hence the reason ex-president Buhari passed the buck to the new administration.
He said, “We dare say that this is a very delicate issue that touches on the lives, if not very survival, of particularly the working people, hence ought to have been treated with the utmost caution, and should have been preceded by robust dialogue and consultation with, the representatives of the working people, including professionals, market people, students and the poor masses.”
The labour leader said Nigerian workers and indeed masses must not be made to suffer the inefficiency of successive governments, adding that they are ready to dialogue with the President.
He added that the labour movement was worried that Tinubu, in his speech, failed to delve into or reveal his plans on how to tackle and address the issue of poor and unchecked deterioration in industrial relations.’’
The price of petrol went as high as N700 per litre in some parts of Anambra State on Tuesday as residents resorted to panic buying.
This comes in the wake of the announcement of the subsidy removal by President Bola Tinubu during his inauguration Monday.
It was gathered that while most of the filling stations within the metropolis had shut their doors since Friday in anticipation of the new price regime, the few ones that sold the commodity witnessed long queues, with some of them selling for between N250 and N350 per litre before the announcement of the subsidy removal.
Although, petrol stations in the major cities of Onitsha, Nnewi, Ekwulobia and some parts of Awka remained shut as a result of the May 30 sit-at-home declared by the Indigenous People of Biafra to mark Biafra Day.
Some of the few residents, who defied the sit-at-home order resorted to panic buying as they buy the product between N500 to N700 from black market dealers.
Also, the few tricycle operators who defied the sit-at-home hiked their fares by up to 100 per cent as distances that were hitherto N100 became N200 as a result of the development.
A restaurant operator in Onitsha, Mama Chisom, said, “Since the announcement of the subsidy removal, filling stations have stopped dispensing fuel so that they will be able to adjust their prices according to the new market price.
“I bought the product for N700 per litre today from the black market to enable me to run my generator for my business. No filling station is selling and the black marketers who have stored the product hiked their prices. This is terrible. We don’t know how tomorrow will look like by the time normal activities resume after the sit-at-home.”
A commercial motorist, Kenechukwu Okonkwo, said, “It’s like the petrol filling stations operators had the inkling that the subsidy removal will be announced most of them have stopped dispensing the products since Friday waiting for the new development.
“Getting the product has been difficult since Friday. Monday and Tuesday were sit-at-home. We don’t know what tomorrow will look like by the time full activities resume. We do not want more hardship than what we are currently experiencing.”
Our correspondent also observed as a few filling stations which started dispensing fuel later in the evening on Tuesday were selling the product for N500 as they have adjusted their pump prices.
Two petrol stations – Altrac Filling Station and Hanaco have adjusted their meters to read N500 per litre as of 7:32 pm on Tuesday with few buyers besieging the places to buy the product.
In a related development, filling stations in Abakaliki, the Ebonyi State capital and its environs were on Tuesday shut down, thus causing lullness in both vehicular and human movement.
The development caused long debilitating queues at the filling stations, which The PUNCH can authoritatively report was not willing to sell to stranded motorists and residents.
Our correspondent who visited some of the filling stations within the capital city, observed that while some which managed to sell, sold at N600 per a litter of fuel, others sold for N750.
The situation also created a soft landing for black market dealers, who sold for N800 and beyond, per litre to frustrated motorists.
A resident told our correspondent that the situation exposed Ebonyians to serious hardship.
The leadership of Labour Party has reacted to President Bola Tinubu’a removal of fuel subsidy, saying the masses should ‘brace up for more surprises and rude shocks.’
The warning was issued by the Acting National Publicity Secretary of LP, Obiora Ifoh, in a statement issued in Abuja on Tuesday evening titled ‘Removal of Fuel Subsidy, First of Many Shocking Policies to be Expected.’
Tinubu had earlier on Monday, in Abuja, affirmed that his administration would not continue to pay subsidy on petroleum products.
He said given the high opportunity cost the Federal Government was suffering to fund subsidies, it was no longer justifiable to continue.
“The fuel subsidy is gone!” Tinubu exclaimed during his inaugural address at Eagle Square, Abuja, shortly after he was sworn-in as the 16th President of Nigeria.
But Ifoh condemned the president’s action, saying it was a unilateral decision taken without any form of consultation with organised labour and other relevant stakeholders.
But the Vice President Kashim Shettima, on Tuesday, warned that Nigeria needed to get rid of fuel subsidy, else the subsidy would get rid of the nation.
Shettima said the administration anticipated fierce opposition to its decision to discontinue fuel subsidy, but vowed to remain resolute in achieving the objective.
“The truth of the matter is that it is either we get rid of subsidy or the fuel subsidy gets rid of the Nigerian nation,” Vice President Shettima told journalists on his first day in office at the Presidential Villa, Abuja.
According to him, the subsidy regime has only funded the “ostentatious lifestyle” of a handful of affluent Nigerians to the detriment of an impoverished majority.
He assured Nigerians that despite the expected opposition from beneficiaries of the subsidy regime, President Bola Tinubu, whom he described as a leader of strong will and conviction, would address the challenge head-on.
“The President has already made pronouncements yesterday on the issue of the fuel subsidy. The truth of the matter is that it is either we get rid of subsidy or the fuel subsidy gets rid of the Nigerian nation.
“In 2022, we spent $10bn subsidising the ostentatious lifestyle of the upper class of the society because you and I benefit 90 per cent from the oil subsidy. The poor 40 per cent of Nigerians benefit very little and we know the consequences of unveiling a masquerade.
“We will get fierce opposition from those benefitting from the oil subsidy scam, but where there is a will, there is a way. Be rest assured that our President is a man of strong will and conviction,” he said.
Shettima said in the fullness of time Nigerians will appreciate the President’s “noble intentions for the nation.”
The issue of fuel subsidy will be frontally addressed. The earlier we do so, the better,” he said.
On the harmonisation of the foreign exchange rates, Shettima said “We are going to collapse it into one. So these are two big elephants in the room and as the days go by, we will be unveiling our agenda.
“He is going to unveil his agenda because as I have always said, there can never be two captains in a ship. He is the President and Commander-in-Chief of the Armed Forces. I’m the Vice President. Your relevance is directly proportional to the level of your loyalty to the President.
“This is a gentleman that I have known for well over a decade; that I have interacted closely with. Rest assured that we are going to work harmoniously as a team, as a family for the greater good of our nation.”
He said President Tinubu is poised to redefine the meaning of modern governance, saying he will provide the needed leadership, but also requested Nigerians to give him and his administration the needed support.
“I want to assure Nigerians that he is going to provide the lead. He is going to provide the leadership and we will rally round him, give him our unequivocally support and loyalty to see to the realization of the Nigerian dream—a Nigeria where every black man in the world should be proud of,” he said.