The Manufacturers Association of Nigeria has stated that the recent hike in the price of premium motor spirit from N568 per litre to N855 will compound the rising cost challenge confronting the country’s real sector.
Recall that the Nigerian National Petroleum Company Limited (NNPC) had on Tuesday, reviewed the pump price of petrol to N897 from N617. Other independent stations also adjusted their pump prices, in some instances above N900 per litre.
Following the announcement, the president of the Nigeria Labour Congress (NLC), Mr Joe Ajaero said the government had acted in bad faith.
He said President Bola Tinubu had, during the negotiation “gave us the devil’s alternatives to choose from: either N250,000 as minimum wage (subject to the rise of the pump price between N1,500 and N2,000) and N70,000 (at old PMS rates).”
He said “we opted for the latter because we could not bring ourselves to accept further punishment on Nigerians.”
He accused the government of implementing “ferocious right -wing market policies,” stressing that “this act of betrayal is consistent with the character of this government.”
Ajaero further described the government’s action as “traumatic and nightmarish” “barely one month and with government yet to commence payment of the new national minimum wage.
He said surreptitious increase in the pump price of petrol is the first among the equally sinister policies the government has up its sleeve.
The labour leader assured the Nigerian people that the NLC stands with them and promised that the “appropriate organs of the Congress will be meeting to take appropriate decisions which will be made public.”
Equally, the Trade Union Congress (TUC) said the sudden price hike is “a blatant disregard for the welfare of the Nigerian people, particularly the working class who bear the brunt of such decisions.
“The sudden hike in fuel and electricity costs will only exacerbate these challenges, leading to further hardship and potential social unrest.
“We urge the government to immediately rescind these decisions, promote policies that will strengthen the naira, and take decisive steps to alleviate the suffering of Nigerians,” the president of TUC, Mr Festus Osifo said in a statement.
He said the burden of the price increase was huge and would affect all facets of the citizen’s socio-economic life.
“In addition, we are deeply troubled by the further hike in electricity tariffs to 250 per cent, a service that is essential for the survival of the poorest in our society,” he added.
The union said the timing and magnitude of the increases, in the absence of any meaningful social security measures, demonstrated a lack of empathy and understanding of the challenges faced by ordinary Nigerians.
The Peoples Democratic Party (PDP) also voiced out its concern about the price hike saying “it is brutal assault on the sensibilities and wellbeing of Nigerians.”
The party’s spokesman, Mr Debo Ologunagba, said in a statement that the price hike is characteristic of the “insensitive and reckless” policy of the All Progressives Congress (APC)-led government.
The party warned that the escalation in fuel costs could exacerbate the already dire economic conditions facing Nigerians, leading to widespread unrest and further destabilising the country.
Ologunagba stated that the secretive and corrupt administration of the petroleum sector and persistent increase in fuel price under the Tinubu-administration without due regard for the wellbeing of the people is akin to pushing Nigerians to the wall and daring them to do their worst.
“The APC administration has consistently shown itself to be anti-people, unconcerned and deaf to the agonies of millions of Nigerians who can no longer afford their daily meals, medications and basic support for families due to the catastrophic high cost of living occasioned by the insensitive and reckless policies of the Tinubu administration.
“Under the Tinubu-led APC administration over 150 million Nigerians have sunk below poverty line, businesses are collapsing daily as the Naira now exchange for over N1, 600 to a dollar with over 34 per cent inflation rate and over 40 per cent unemployment rate which are expected to rise further with the latest draconian increase in the price of fuel,” the PDP said.
Ologunagba argued that the APC administration had consistently shown itself “to be anti-people, unconcerned and deaf to the agonies of millions of Nigerians who can no longer afford their daily meals, medications and basic support for families due to the catastrophic high cost of living occasioned by the insensitive and reckless policies of the Tinubu administration”.
He added: “There is practically no hope in sight under the current APC government policies, as major multi-national companies continue to exit our country in droves in the face of ill-conceived and ill-implemented macro-economic policies.
“The admission by the APC-led federal government that it has handed the fate of Nigerians to oil racketeers in the name of a free market economy further validates the position of the PDP that the Tinubu-led administration has abdicated the primary purpose of government; which is to provide for the welfare and security of the citizens.
“It is inexplicable that the APC administration continues to increase fuel price despite the scandalous revelation in the public domain that it is secretly paying a whopping N5.4 trillion as fuel subsidy for 2024.
“The APC government has now become an enabler of a cabal of corrupt APC rent-seekers who derive pleasure in inflicting pains on Nigerians while hugely benefiting from the proceeds of incessant increase in fuel price to satisfy and fund their luxury appetite and consumption.
“With the hopeless state of affairs of our nation today, our party wonders what President Tinubu, during his numerous trips abroad, says to his foreign counterparts in nations where leaders prioritise the welfare of their people!
“Nigerians will recall that the PDP had on several occasions offered constructive advice and suggestions on the management of the economy, which the APC government in its arrogance in failure ignored.
“Our party restates that with a deft, transparent and innovative management of resources, economic potentials, comparative advantage and national refining capacity, petrol should not sell more than N250 per litre in Nigeria,” the party said.
The Manufacturers Association of Nigeria (MAN) also slammed the government for the petrol price hike saying the development would lead to higher prices of other commodities in the face of the dwindling disposable income of the average Nigerian.
The director general of MAN, Mr Segun Ajayi-Kadir, said in a statement that as more of the income of Nigerians goes to transportation and energy, they would find themselves with less money to spend on other essentials, leading to a decrease in demand for non-essential goods.
However, he admitted that with a global increase in crude oil prices and Nigeria’s dependence on imported fuel due to non-operational refineries, a price hike was inevitable.
“The increase in the cost of crude oil will have a direct impact on the cost of importing fuel into Nigeria and expectedly, the NNPC would at some point, adjust domestic prices.
“Also, right from the time fuel subsidy was either reduced or removed, it became inevitable that the price may rise,” he added.
Ajayi-Kadir further said the economic scenario is likely to contribute to a further increase in inflation, putting additional pressure on household budgets.
He added that the manufacturing sector’s vulnerability to the developments included the rise in the costs of production and logistics, forcing manufacturers to increase their prices and risk a buildup of unsold inventory and reduced capacity utilisation, which would potentially lead to a downturn in manufacturing performance.
“The increased costs could force some to scale down operations or even shut down if they are unable to pass on the additional costs to consumers.
“Small and medium-sized enterprises would be hardest hit by the effects of a PMS price hike as they operate on tight margins.
“Businesses may need to adjust their pricing strategies, which could lead to reduced profit margins if consumer demand weakens,” he said.
“The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) also expressed its concern increase in the pump price of the product.
“While we understand the complex factors that can influence fuel prices, such as global oil market dynamics and exchange rate fluctuations; we are troubled by the lack of prior notice and clear explanations provided by the government and the Nigerian National Petroleum Company Limited, NNPC, regarding this development.
“The timing of this price hike is particularly concerning as it has the potential to further exacerbate the impact on businesses and consumers, especially the vulnerable segments of the population and those on fixed incomes, who are still adjusting to the recent increase in the national minimum wage.”
“NACCIMA calls on government and NNPC to engage in constructive dialogue with relevant stakeholders, including the organised private sector and labour unions, to address concerns raised about this price increase and its potential effects on the economy.
“We are particularly interested in understanding the reported conditions that may have been agreed upon during the minimum wage negotiations, and how the current development aligns with those understandings. Maintaining trust and credibility in the government’s economic policies is crucial for fostering a conducive business environment and promoting inclusive growth.
“Furthermore, we urge the authorities to provide clarity on the NNPC’s financial reporting, which has seen conflicting statements about the company’s profitability and financial obligations.
“NACCIMA remains committed to working collaboratively with government and other stakeholders to find sustainable solutions that balance the needs of businesses, consumers, and the broader Nigerian economy. We believe that open dialogue and a shared commitment to the nation’s prosperity are key to navigating these complex challenges,” the NACCIMA national president, Mr Dele Oye said in a statement.
For its part, the Lagos Chamber of Commerce and Industry (LCCI) said the removal of removal of petrol subsidy and consequent increase in price present significant challenges to Nigerians and businesses.
Its director general, Dr. Chinyere Almona, said in a statement that although current petrol subsidy was unsustainable and the burden of the shortfall had accumulated to a debt of N10 trillion, “completely removing it and subjecting Nigerians to a significant fuel price hike presents significant challenges.”
“A steep price hike would likely trigger widespread price increases, potentially reversing the recent easing in inflation seen in July and leading to another surge in inflation rates. Balancing the need for fiscal responsibility with the economic impact on citizens is a complex task for the government.”
LCCI added that the impact of the latest hike in petrol price on businesses “will be severe, with fuel prices affecting supply and logistics, power generation, transportation, and factory operations.
“The cost of doing business will skyrocket, prices of goods will rise, and some firms may shut down due to low demand in the face of weakening consumer purchasing power. Of course, this will be followed by job losses,” she said.
The chamber stated that even though the “situation is critical, when considered against the background of NNPC, which owes suppliers about $6 billion, the operation of the Dangote Refinery, which now produces fuel and diesel for sale, offers a glimmer of hope.
“This game-changing intervention could restore some stability to the oil and gas sector, which has been grappling with significant distortions this year.”
“Supporting the development of additional local refineries to process our crude for local consumption and potential export across Africa is the way forward.
“This long-term strategy is crucial for the stability and growth of our economy,” she added.
As an immediate intervention, Almona said it would be beneficial for the Port Harcourt Refinery to commence operations alongside production from the Dangote Refinery.
“Given the current challenges with importing refined fuel, relying on local production may be the most viable option at this time.
“We recommend sustaining local supplies, with the expectation that demand will eventually align with supply, leading to equilibrium pricing across various sources,” she said.
Similarly, the Nigerian Bar Association (NBA) said the significant and abrupt hike in the price of fuel has imposed an unbearable burden on the already overstretched finances of ordinary Nigerians, further aggravating the economic challenges faced by millions across the country.
“The cascading effects of such a steep increase in fuel prices on the cost of living, transportation, and essential goods and services are deeply troubling. Many Nigerians are already grappling with inflation, unemployment, and other forms of hardship, and this additional financial strain is simply unsustainable. If allowed to persist, this price hike will only deepen the poverty and hardship experienced by the citizens.
“While the NBA acknowledges the necessity of economic reforms and recognizes the government’s responsibility to make difficult decisions, these decisions must be made with the utmost consideration for their impact on the welfare of the citizens. The NBA views this sudden price hike as not only harsh but also unjustified at this time.
“In light of this, the NBA calls on the Federal Government to immediately halt the implementation of this policy and engage in meaningful dialogue with all relevant stakeholders, including civil society organizations, labor unions, and economic experts, to explore more sustainable and less punitive alternatives.
“We urge the government to prioritise the welfare of its citizens, particularly the most vulnerable, and to pursue policies that alleviate rather than exacerbate the hardships faced by the Nigerian people.
“The NBA remains steadfast in its commitment to upholding the rule of law and will continue to advocate for the rights and well-being of all Nigerians. We stand ready to engage constructively with the government to find a more equitable solution that ensures economic stability while safeguarding the interests of all Nigerians,” the association’s president, Mr Afam Osigwe, said in a statement.
For the Yoruba socio-cultural group, Afenifere, said with latest increase in the price of fuel, the cost of fuel in Nigeria had risen by 460 per cent in 15 months.
In a statement signed by its spokesman, Mr Jare Ajayi, the organisation wondered why the national oil company which declared N3.3 trillion net profit in its 2023 audited financial statement could also claim that it was indebted to the tune of nearly $7 billion.
It said Nigerians are currently going through a lot of challenges as a result of the biting socio-economic crunch and the attendant hardships.
“It is, therefore, a wrong time to come up with any policy that will increase the undesirable challenges Nigerians are going through presently.
“Failure by the NNPCL to reverse the latest increment in fuel price will rub off negatively on some policies of Tinubu administration to ease things for the citizens. Policies, such as the Students Loan Scheme and Consumer Credit Scheme that are just taking off.”
“It is common knowledge that the cost and availability of energy, such as petrol, gas, electricity, diesel and kerosene are major factors, not only in production and services, but also on the quality of well-being that Nigerians can enjoy.
“Hikes in prices of these energy sources have astronomically increased the costs of services and commodities, reduced the disposal incomes of average Nigerians, and heightened their health risk.
“The combination of all these are making a daily living an onerous task for the majority of the citizens. Because millions of the Nigerians had been described as being ‘multi-dimensionally poor’, the recent hike in costs of fuel and electricity are uploading the number of people in that category phenomenally,” the group said.
The Yoruba Council of Elders (YCE) also expressed worry over the state of the nation, saying “there is, presently, a lot of suffering in the land,” and urged Tinubu to tackle the current hardship faced by Nigerians.
The YCE, in a statement by its general secretary, Mr Oladipo Oyewole, said: “Without regular supply of electricity and with the official announcement of an increase in the price of Petroleum Products (PMS), the current hardship cannot but be increased in daily living by Nigerians.
“The Federal Government ought to immediately pursue every avenue to make available to our people, the dividends of democracy. Not through the distribution of palliatives (that does not seem to filter to the bottom) but by putting in place avenues to enhance proper/quality living through effective governance administration.
“Every Nigerian should be entitled to enjoy our common resources
“Indeed, Nigerians are suffering deeply at this time, no light, no fuel, no food.
“Mr President should, without delay, revisit his drawing board to attend to the short-term needs of Nigerians (the immediate needs of the people) whilst pursuing the long-term vision of making Nigeria a better place for growth and development
“As Elders, YCE wants immediate succour for the people to boost the welfare of Nigerians so that all can live in comfort and harmony
“As far as this Elders Council is concerned a lot of administrative work by government is (absolutely) required for the masses of this country to live, stay alive as respectable and responsible people.
“The state of this nation today is a pill that has a bitter taste.
“The administration of President Bola Tinubu should do something quickly to ensure proper steering of its intentions to establish and install better governance in Nigeria.
“In fact, the presidency should do all possible to alleviate the suffering of all Nigerians immediately and without delay.”
Meanwhile, the presidency has disproved that President Tinubu during the minimum wage negotiation made any offer to the labour leaders in exchange for fuel price hike.
The senior special assistant to the president on print media, Mr Abdulaziz Abdulaziz, made the denial in a statement while reacting to Ajaero’s claims.
“I sat through the two meetings President Bola Ahmed Tinubu had with labour leaders on minimum wage.
“At neither of the meetings was an offer made in exchange of fuel price hike. Ajaero is once again playing his dirty politics with the emotions of Nigerians,” Abdulaziz said.
However, the spokesman for NLC, Mr Benson Upah, responded to the denial and described Abdulaziz as someone “suffering from selective amnesia or attention span deficit.”
“Our attention has been drawn to the denial credited to the Senior Special Assistant to Mr. President on the Print Media, Mr. Abdulaziz Abdulaziz.
“In the said statement, Abdulaziz was quoted as saying: ‘I sat through the two meetings President Bola Ahmed Tinubu had with labour leaders on minimum wage. At neither of the meetings was an offer made in exchange for the fuel price hike. Ajaero is once again playing his dirty politics with the emotions of Nigerians.
“Whatever the matter is with Abdulaziz, we stand by our statement. And if Abdulaziz was at those meetings, as he claimed, he should be courageous enough to let the world know whether the president gave the labour leaders one hour to meet and resolve to either accept and allow an increase or accept N62, 000,” Upah said.
