As the United States-Israeli war against Iran takes toll on the international oil market, a coalition, Partners for National Economic Progress (PANEP), has appealed to the federal government to cushion the harsh effects on Nigerians by increasing crude supply and subsidising the price to local refineries.
The coalition said over half of the global oil supply comes from Iran and the Gulf countries. It lamented that the attack on Iran by Israel and the US and the consequent disruption of oil production and supply have led to an exponential increase in global oil prices.
Addressing a press conference in Abuja yesterday, the conveners of PANEP, Comrades Danesi Momoh Prince, Igwe Ude-Umanta, Olamide Odumosu Olayinka and Dada Daniel Omaga, warned that the “increase will certainly continue as the war progresses, especially with the vow of the Iranian Revolutionary Guard Corps to continue the blockade of the Strait of Hormuz.”
PANEP said, “In the 10 days of the war, local petroleum products prices have risen to neck-breaking points, with low-income earners and the vulnerable facing daily survival apprehension. The price of PMS moved from an average price of between N830-N870 to N1300-N1400, while AGO spiked from N1200-N1700.
“This has triggered immediate inflation in the cost of transportation and ultimately, in other services and commodities. While we note that there cannot be any discussion about a return to petroleum products subsidy, no matter how brief, there could still be a way to mitigate this harsh reality of an existential challenge for many poor homes in Nigeria.
“Therefore, the federal government, through the Nigerian National Petroleum Company Limited (NNPCL), should prioritise and increase crude supply to the local refineries. It should further directly subsidise it in a manner that will reflect in reduced pump prices of products, thereby easing the hardship faced by Nigerians,” PANEP said.
Momoh Prince said this is particularly instructive following the revelation by Dangote Refinery that, though it is able to guarantee national petroleum products security and stability for Nigeria in the face of this war, it has not been able to access more than 32% of its due local crude. In fact, it receives an average of 28%.
He said Nigeria, as an oil-producing country, should not be fully exposed to global oil price volatility. So far, Nigeria has not experienced fuel shortages or queues, and will not, according to assurances from Dangote Refinery and Petrochemical Limited. However, product prices will remain high in Nigeria if it continues to source crude from a limited global supply, when it could be sourced locally.
The CSO said Nigeria should be very grateful to Dangote Refinery and thank God that it is producing at a time like this, adding that “it is laughable for anybody or group to blame Dangote for the increase in prices of products. On the contrary, it is because of Dangote Refinery that we have adequate supplies and do not pay higher than the prevailing prices.”
According to Momoh Prince, “any group that acts on illiteracy, misinformation and instigation against Dangote Refinery will be adequately confronted by PANEP. It is for the federal government, therefore, to know that it cannot afford to think of only gains at the expense of the masses. It should give back a little to the local market during this period to alleviate the suffering of the masses.
“Let us not forget that beyond the rhetoric of the main actors in this war, the entire situation remains very complicated. And in the next few days, the price of PMS could reach N2,000 if the war does not end. This situation will certainly lead to a national crisis of chaotic proportions. The federal government should not wait for such a scenario before looking for a knee-jerk approach,” he said.
