The Trade Union Congress on Tuesday took a swipe at the Minister of State for Petroleum Resources, Chief Timipre Sylva, who told Nigerians to prepare for the pain associated with the increase in crude oil price.

Also, the Manufacturers’ Association of Nigeria, the Lagos Chamber of Commerce and Industry and other stakeholders on Tuesday advised the Federal Government to use rising revenue from crude oil to tackle poverty and drive an all-inclusive growth.

The groups stated this in separate interviews with The PUNCH while reacting to a statement by Sylva, who earlier on Tuesday warned Nigerians to expect benefits and pain from the rising price of crude oil in the world market.

For Nigeria, which relies on crude oil for about 50 per cent of government revenues and over 90 per cent of export earnings, rising oil price means increased revenue.

On the other hand, rising oil price also translates to increased cost of petroleum products as the country depends heavily on imports due to a lack of domestic refining.

Sylva, who spoke at the launch of the Nigerian Upstream Cost Optimisation Programme in Abuja, said, “Since we are optimising everything, NNPC (Nigerian National Petroleum Corporation) needs to also think about the optimisation of product cost because as we all know oil prices are where they are today: $60.

“As desirable as this is, this has serious consequences as well on product prices. So we want to take the pleasure and we should as a country be ready to take the pain.”

He added, “Today, the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy. So, somewhere down the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it.

“As a country, let us take the benefits of the higher crude oil prices and I hope we will also be ready to take a little pain on the side of higher product prices.”

The PUNCH had reported exclusively on Tuesday that the landing cost of Premium Motor Spirit (petrol) imported into the country had risen by 13.34 per cent in one month to about N180 per litre on the back of the increase in global oil prices.

The international oil benchmark, Brent crude, which rose to $59.34 per barrel on Friday from $53.70 per barrel on January 7, crossed the $60 per barrel mark on Tuesday for the first time in over 12 months.

Crude oil price accounts for a large chunk of the final cost of petrol, and the deregulation of petrol price by the Federal Government last year means that the pump price of the product will reflect changes in the international oil market.

Since November 13, 2020 when the pump prices of PMS were last increased in the country, the oil price has increased by over 45 per cent.

Going by the petrol pricing template of the Petroleum Products Pricing Regulatory Agency, the landing cost of petrol rose to N179.67 per litre last Friday from N158.53 per litre on January 7, with the expected open market price (pump price) of the product increasing to N202.67 per litre from N181.53 per litre.

The rising price of crude oil pushed the cost of petrol quoted on Platts to $543.25 per metric tonne (N157.99 per litre, using N390/$1) last Friday from $480.25 per MT (N139.67 per litre) on January 7.

The NNPC, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.

The Federal Government removed petrol subsidy in March 2020 after reducing the pump price of the product to N125 per litre from N145 on the back of the sharp drop in crude oil prices. The price reduction lasted till June.

Nigerians saw increases in the pump prices of petrol in four months, rising from N121.50–N123.50 per litre in June to N140.80-N143.80 in July, N148-N150 in August, N158-N162 in September and N163-N170 in November.

Source: PUNCH