Subsidy: Fuel sells for N600 per litre, yet Queue grow longer as gas stations close

The price of Premium Motor Spirit, more commonly known as gasoline, has risen to N600 per litre from N195 per litre in several regions of the country less than 24 hours after President Bola Tinubu announced the end of fuel subsidies.

Long lines once again appeared at fuel stations in Lagos, Abuja, Ilorin, Benin, Asaba, Port Harcourt, Kano, Makurdi, and other important cities and metropolitan regions as a result of the development, which also caused a 100% increase in transportation costs.

Many fueling stations closed their doors and refused to dispense petrol to drivers, making the situation worse by increasing scarcity and causing panic and desperation buying at the fueling stations that were available to consumers.

In his inaugural speech at Eagle Square on Monday, Tinubu declared that the subsidy program was officially over. He noted that the 2023 Appropriations Act did not include funding for gasoline subsidies after June, which marked the end of the 18-month extension period that the Muhammadu Buhari administration had approved for the program’s termination.

According to data from the Nigerian National Petroleum Company Limited and the Nigeria Extractive Industries Transparency Initiative, The PUNCH reports that the petrol subsidy ate up N6.88 trillion under the administration of the former President Buhari.

To the dismay of the populace, fuel retailers increased the pump price in response to the President’s Monday statement.

Queues get longer

While this was going on, lines grew longer in some areas of Lagos and Ogun states as transporters raised their rates and some petrol retailers increased their pricing to as much as N600 per litre.

The Lagos-Badagry Expressway’s Mobil Filling Station at First Gate Bus Stop had a large line of cars and people with jerry cans, but no fuel was being supplied there. Half of the freeway was blocked by the line of cars.

Adebayo Emmanuel, a commercial bus driver, told one of our reporters at noon that he had been at the station since about 9 am but hadn’t yet received fuel.

There were vehicles stopped at the entrance to the Peridot station along Festac Access Road, but it was closed.

The Apapa-Oshodi Expressway’s Second Rainbow Bus Stop NNPC filling station has four pumps, but none of them were dispenseing petrol.

While Nigerians with kegs put up tents there, the Total Energies filling station at Ojota and the Mobil station before the Otedola Bridge were also closed.

Due to the Lagos-Ibadan Expressway’s ongoing work on that section, vehicles were unable to approach the outlet.

At the same time, the line for gas at the North West gas station and Westex Bus Stop in the direction of Gbagada nearly reached Ikorodu Road.

The Oshodi-Apapa corridor and the Oshodi-Ojota-Ketu route both witnessed 100% increases in transportation costs, according to our correspondent.

There were very long lines of drivers waiting to fill up at the petrol stations when one of our reporters visited those along the Ikotun, Igando, and Egbeda axis of Lagos.

One of our reporters in Ogun State saw the closure of all the gas stations between Akute and Alagbole, including Mobil, Enyo, and two NNPC locations.

Tuesday saw worsening lines for gasoline at the few filling stations that were still operating in Abuja, Nasarawa, and Niger States because other stores were closed.

The Dozzy, Fynfield, and NNPC filling stations on the Murtala Mohammed expressway in Calabar had a huge queue of cars waiting when locals got up on Tuesday.

A litre of gasoline cost N400, but some areas of the city had black marketers selling it for N800.

There was a big line at the Northwest gas station, and the employees indicated they were awaiting instructions on how much to distribute the product.

While Fynefield was on Goldie Street, where there were lengthy lines in the morning, a litre of fuel cost N600 in Atimbo.

On Monday night, lines also started to form at gas stations in Ilorin, the state capital of Kwara.

According to research, several gas stations in the town were open from early in the morning till 2:00 pm and were charging between N189 and N205 per litre for the product.

Only a few stations, notably Bovas, Shirafa, and Geri Alimi, were dispensing the product at the time this report was filed.

While Bovas charged N200 per litre for fuel, the Tigress fuel station in the Odota neighborhood along the Ilorin/Ogbomoso route charged N205 per litre for PMS.

Many other businesses were closed, including NIPCO, Total, Abanik, OANDO, and the NNPC on Asa Dam Road.

On Tuesday, frantic drivers surrounded a number of stations in Asaba, the capital of Delta State.

While other stations offered between N450 and N550 per litre, the majority of the main marketers have increased their pump pricing to N230 and N260.

However, a number of businesses turned away clients because their gates were sealed tightly.

Residents of Niger grunt

The similar thing happened in Minna, Niger State, where on Tuesday, desperate locals waited up at petrol stations.

Numerous gas stations were sealed up after Tinubu announced the suspension of subsidies, with the exception of the NNPC Mega stations.

As panic purchasing persisted in the city, most traders in Benin, Edo State, were selling fuel for between N350 and N520 per litre.

However, the product was priced at N189/litre at the NNPC Mega Station on Sapele Road.

The line to the EFCC Office and Protea Hotel was long when The PUNCH visited the NNPC Mega Station on Tuesday. It extended from Sapele Road to High Court Road.

Paul Osato claimed that he left his house quite early in the morning and, after stopping at three gas stations, was able to purchase for N350 per litre.

“I arrived at the filling station so early in the hopes of purchasing fuel, but after stopping at three different stations, I was able to do so at the price of N350 per litre. After learning that some stations were selling at N500 per litre, they began thinking about ways to raise the price even before I went.

Black marketers have taken over the streets of the Gombe metropolis after doing brisk business selling gasoline in jerry cans for N650/l.

At the petrol stations where there were large lineups, the rates ranged between N195 and N250 per liter.

Ugo Willie, a local, claimed: “I traveled all the way to Doma in search of gasoline from midday to two o’clock because I needed fuel. No station was dispensing; their goal was to make the state artificially scarce.

On Tuesday evening, Katsina State Governor Mallam Dikko Radda authorized independent marketers operating in the state twenty-four hours to reopen closed gas stations and resume selling gasoline to drivers.

Following an urgent meeting with independent merchants at Government House in Katsina, the governor issued the order.

He warned the marketers that if they disobeyed his order, government would resort to forcing the marketers to begin supplying gasoline to vehicles.

According to Governor Radda, complaints were made about some gas stations closing their doors to customers while others raising the price of the product.

The conference, according to the governor, was called so that it could be discussed how to prevent the state’s residents from going through countless problems as a result of the marketers’ operations.

In order to provide gasoline for the state’s residents, he asked members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) for their help and understanding.

Alhaji Abbas Hamza, the state’s IPMAN chairman, responded by promising the governor that IPMAN members would review the decisions made with the state administration during the emergency meeting.

On Tuesday, several gas stations, particularly those in the state capital of Katsina, closed their doors to consumers.

However, some newly opened gas stations were charging N350 per litre for petrol.

Residents of Owerri, in the eastern heartland, are feeling the squeeze as the price of gasoline has increased from between N235 and N240 per litre to between N380, N400, and N450.

On Monday night and Tuesday morning, our correspondent, who was keeping an eye on the situation, noticed that several gas stations had shut down.

A bus ride now costs N300 instead of N200, while trips that once cost N100 now cost N200.

Tinubu Meets CBN Governor and Kyari

In response to the fuel issue, Tinubu met on Tuesday at the Presidential Villa with the Group Chief Executive Officer of the NNPCL, Mele Kyari, the Governor of the Central Bank of Nigeria, Godwin Emefiele, and others.

After the discussion, speaking to reporters, Kyari said that the Federal Government could not pay subsidies again since it owed the corporation N2.8 trillion for the money it had spent on gasoline subsidies.

“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 said to State House Correspondents following his meeting with the President.

Asserting that the subsidy payment was no longer tenable since it made it difficult for the corporation to finance its main businesses, Kyari agreed with the President’s position.

We have not got any payment from the Federation in any way since the provision of the N6 trillion in 2022 and the N3.7 trillion in 2023, he claimed. This indicates that the Federal Government is unable to pay, hence we have kept funding this subsidy from the NNPC’s cash flow.

When taxes and royalties are subtracted from our financial responsibilities, there is still a balance that needs to be covered by cash flow. And that’s gotten so problematic that it’s harming our other business operations.

“We can’t keep some of this money to put into our main operations. The ultimate effect is that it may present a significant issue for the business, and we have repeatedly emphasized this to the government, asking them to reimburse NNPC for the money we spent on the subsidy.

Kyari expressed his dissatisfaction with the federation’s failure to pay the unpaid N2.8 trillion subsidy payment.

The nation’s resurfacing gasoline lines, according to Kyari, are reasonable because marketers want to grasp the significance of the president’s declaration that “subsidy is gone.”

According to him, buyers rushed for the product as a result of the remark’s uncertainty, creating lines.

The head of NNPCL told Nigerians that the government will take action to mitigate the effects of the suspension of subsidies.

Faruk Ahmed, the CEO of the Nigerian Mainstream and Downstream Regulatory Authority, also joined Kyari in declaring that the FG will not impose any price caps on the sale of petroleum products in the nation.

The oil company’s boss informed Nigerians that the company has over 30 days of PMS storage and supply while acknowledging that the President’s declaration had caused lines to form at filling stations. He also pleaded with the populace not to engage in panic buying.

In addition, he claimed, the business was in talks 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 continued by saying that the business would continue to guarantee the availability of PMS and other petroleum products in its capacity as the supplier of last resort, as required by the Petroleum Industry Act.

According to Ahmed, the government will protect Nigerians’ interests by making sure that no marketer takes advantage of them and by granting licenses to potential importers.

“Mr. President’s decision to remove the subsidy has made it easier for any market or firm that wants to import PMS. And we are prepared to grant them licenses. At least it will allow for more competition, which will lighten the load.

And let me to reassure Nigerians that the NMDRA and the Federal Competition and Consumer Protection Commission would watch out for consumers’ interests. We’re going to collaborate on this,” he remarked.

Contrary to rumors and worries, the NMDPRA claimed that the President’s announcement was in keeping with the Petroleum Industry Act of 2021, which called for complete deregulation of the downstream petroleum industry in order to spur investment and growth.

However, it emphasized that Nigerians shouldn’t panic because it was carefully coordinating with NNPCL and other important stakeholders to ensure a seamless transition, prevent any disruptions in supplies, and assure that consumers weren’t shortchanged in any way.

This information was provided in a statement released in Abuja by the NMDPRA’s general manager of corporate communications, Kimchi Apollo, who also made clear that there was more than enough PMS on hand to meet demand.

The downstream regulator said: “We have taken the required precautions to guarantee that distribution systems remain unbroken and fuel is easily accessible at all filling stations across the country.

In an effort to diffuse the situation, the President noted that the decision he made during his inaugural speech on Monday will not immediately go into effect and that the removal of fuel subsidies is a process that has been ongoing.

In a statement sent to Twitter by the Asiwaju Bola Ahmed Media Center, Tinubu warned Nigerians against panic buying that had followed his speech.

The message in the tweet said, “The public is cautioned to notice that President Bola Tinubu’s proclamation that “subsidy is gone” is neither a recent development nor an activity of his new administration.

“Considering that the previous administration’s budget for fuel subsidies was only intended to cover the first half of the year, he was only communicating the status quo.

Effectively, this means that the Federal Government won’t have the cash necessary to maintain the subsidy regime by the end of June, which will result in its termination.

The panic buying that followed the letter is unnecessary and won’t have an immediate impact, according to the statement.

AbdulRahman AbdulRazaq, the governor of Kwara State and chairman of the Nigeria Governors’ Forum, has warned oil marketers to refrain from putting the public through unnecessary hardship by inflicting fake gasoline shortages in the state and elsewhere in order to alleviate the shortage of fuel brought on by hoarding.

In a statement released on Tuesday and signed by his chief press secretary Rafiu Ajakaye, AbdulRazaq declared that the current circumstance was uncalled for.

According to Ajakaye, “the governor is extremely concerned by reports of sudden fuel shortages in several sections of the state, stressing that this is entirely uncalled for.

Since fuel marketers had purchased what they currently had at heavily discounted prices, he ordered them to quickly release petrol to the public under the standard pricing structure.

The governor advises the marketers to stop doing anything that may be considered economic sabotage of the people, he said. It is opportunistic to hoard fuel purchased at reduced costs and to incite panic in the state; this behavior will not be tolerated. A task team would be headed by His Excellency the Deputy Governor Mr. Kayode Alabi to guarantee that no petroleum marketer places the people of Kwara State through unjustified hardship.

The Task Force will enter the pits of the fuel stations, so take heed. Along with other consequences, any gas stations discovered to be stockpiling fuel will have their Certificate of Occupancy removed.

In a same spirit, the governor of Ekiti State, Mr. Biodun Oyebanji, has also warned state marketers against stockpiling petroleum goods and threatened to punish bad actors.

At the same time, lines of cars began to form at the gas stations in the state, especially in Ado Ekiti, the state’s capital.

Heavy punishments are in store for any gas station or marketer who is discovered to be stockpiling petroleum goods or taking part in the state’s arbitrary price hikes, according to Oyebanji.

A press release from the governor’s special adviser for media, Yinka Oyebode, with the heading “EKSG cautions filling stations, petroleum marketers against hoarding of fuel,” issued the threat.

He exhorted residents of the state to conduct their everyday affairs in peace and steer clear of any hostile situations.

“Await further instructions on the implementation of the planned Federal Government subsidy removal and avoid actions that are capable of inflicting hardship on the citizens,” Oyebanji advised the marketers.

He claims that the Nigeria Governors’ Forum will discuss fuel subsidies at its meeting the following week.

The Osun State Government on Tuesday threatened to take action against hoarders in a similar effort to stop the practice.

Olawale Rasheed, the governor’s spokesperson, said in a statement that the hoarding was already putting the state’s residents through unnecessary suffering.

The administration declared it would not tolerate the scenario, labeling it as inhumane and unpatriotic.

The administration noted that the “Special Monitoring Team on Fuel Scarcity set up by His Excellency, Governor Ademola Nurudeen Jackson Adeleke is still effective and shall not condone any form of economic sabotage” in order to address the issue.

“As of today, May 30, 2023, the Committee shall begin special monitoring of all the filling stations throughout the state in collaboration with law enforcement agencies and other stakeholders,” the statement continued.

Additionally, on Tuesday, Bayelsa State Governor Douye Diri warned oil marketers in the state against stockpiling fuel and hiking the price of the commodity.

In a statement released by his chief press secretary, Mr. Daniel Alabrah, Diri threatened to close any gas station that disobeyed the order.

Rep praises Tinubu

The President’s decision to withdraw the fuel subsidy has been praised by the House of Representatives.

The commendation followed the unanimous passage of a motion of urgent public concern proposed by Jimoh Olajide (APC/Lagos), a member of the House, at the plenary on Tuesday.

The House is persuaded that more legislative acts to enable Mr. President in delivering democratic dividends will significantly improve development because he requested it and actively campaigned for it, Olajide stated in moving the resolution. He continued, “And he is prepared for the task at hand.”

The Trade Union Congress, however, threw the President over the stage during his inaugural address on Monday in protest of the situation that Tinubu’s statement had sparked.

The President and General Secretary of the TUC, Festus Osifo and Nuhu Toro, stated that they expected the President to be prudent with the current situation during a news conference on Tuesday in Abuja.

The withdrawal of the subsidy was a “delicate issue,” according to Osifo, who delivered the contents of the briefing to journalists, which is why the former president Buhari handed the blame to the incoming administration.

In his words, “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 labor leader stated that the inefficiencies of past governments should not be forced upon Nigerian employees, or the population, and added that they are prepared to speak with the President.

The labor movement, he continued, was concerned that Tinubu had not discussed or made clear in his speech how he intended to handle the problem of the poor and unrestrained degradation in industrial relations.’’

In some areas of Anambra State on Tuesday, the cost of gasoline increased to as much as N700 per litre as locals resorted to panic buying.

This follows President Bola Tinubu’s Monday inaugural speech announcement that subsidies would be removed.

The few stations that did sell the product reported long lines, with some of them selling for between N250 and N350 per litre before the announcement of the subsidy removal. This was despite the fact that the majority of filling stations in the metropolis had closed their doors since Friday in anticipation of the new price regime.

Although, due to the Indigenous People of Biafra’s declaration of a sit-at-home on May 30 to observe Biafra Day, gas outlets in some areas of Onitsha, Nnewi, Ekwulobia, and some other parts of Awka remained closed.

Some of the few locals who disobeyed the sit-at-home directive resorted to panic buying, purchasing the commodity from black market vendors for between N500 and N700.

The few tricycle drivers who refused to stay at home increased their prices by up to 100% as a result of the development, turning formerly N100 distances into N200.

Mama Chisom, a restaurant owner in Onitsha, stated that filling stations have ceased supplying fuel since the announcement of the subsidy elimination so that they can change their rates to reflect the new market price.

“I purchased the item from the illegal market today for N700 per litre so that I could power my business’ generator. Since there are no gas stations selling, the black marketers who have the commodity in storage raised their rates. This is awful. When normal activities resume following the stay-at-home day, we won’t know how tomorrow will turn out.

Kenechukwu Okonkwo, a commercial driver, claimed: “It seems like the owners of the gas stations had some intuition that the subsidy reduction would be announced because the majority of them had ceased distributing the products since Friday waiting for the new development.

“Since Friday, getting the stuff has been challenging. Tuesday and Monday were home days. By the time regular activities pick back again, we don’t know what tomorrow will hold. We don’t want to go through any more adversity than we already have.

Our correspondent also noted that a few gas stations that began dispensing petrol later on Tuesday evening were doing so at a price of N500 due to changes they had made to their pump rates.

As of 7:32 p.m. on Tuesday, two gas stations—Altrac Filling Station and Hanaco—had modified their meters to read N500 per litre, with few customers thronging the locations to purchase the product.

In a similar development, filling stations in Abakaliki, the capital of the Ebonyi State, and its surroundings were closed on Tuesday, which slowed down both human and vehicular transportation.

The development resulted in protracted, crippling lines at the gas stations, which, according to The PUNCH, were unwilling to sell to stranded drivers and locals.

While some of the filling stations in the capital city managed to sell, they did so at a price of N600 per litter of petrol, while others did so at a price of N750.

Black market vendors, who sold for N800 and more per litre to irate motorists, also benefited from the situation.

According to a local, the scenario put Ebonyians through severe hardship.

President Bola Tinubu’s decision to end fuel subsidies prompted a response from the Labour Party leadership warning the populace to “brace up for more surprises and rude shocks.”

The warning was given by the acting national publicity secretary of the LP, Obiora Ifoh, in a statement headed “Removal of Fuel Subsidy, First of Many Shocking Policies to be Expected” that was released in Abuja on Tuesday evening.

Earlier on Monday, in Abuja, Tinubu declared that his administration will stop providing subsidies for petroleum items.

He claimed that it was no longer justifiable to continue considering the significant opportunity cost the Federal Government was bearing to finance subsidies.

“There is no longer a fuel subsidy!” Soon after being sworn in as the 16th President of Nigeria, Tinubu screamed during his inauguration speech at Eagle Square in Abuja.

Ifoh, however, denounced the president’s conduct and argued that it was a unilateral choice made without consulting organized labor or any other important parties.

Shettima shed more light

However, on Tuesday, Vice President Kashim Shettima issued a warning that Nigeria needs to end its gasoline subsidies or else the country will be destroyed.

Shettima stated that the administration foresaw strong opposition to its decision to end fuel subsidies, but vowed to remain unwavering in pursuing the goal.

On his first day in office at the Presidential Villa, Abuja, Vice President Shettima told journalists, “The truth is that it is either we get rid of subsidy or the fuel subsidy gets rid of the Nigerian nation.”

He claims that the subsidy system has only served to support the “ostentatious lifestyle” of a small number of wealthy Nigerians at the expense of the country’s vast majority of poor people.

He reassured Nigerians that President Bola Tinubu, whom he characterized as a leader of strong will and conviction, would face the challenge head-on despite the anticipated opposition from beneficiaries of the subsidy regime.

“On the subject of gasoline subsidies, the President had made statements yesterday. The Nigerian country will either be eliminated by the fuel subsidy, or we will eliminate the subsidy.

“Because you and I receive 90% of the benefits from the oil subsidy, in 2022 we spent $10 billion subsidizing the showy lifestyle of the elite strata of society. The impoverished 40% of Nigerians benefit very little, and we are aware of what happens when a mask is taken off.

“Those who profit from the oil subsidy scheme will fight us tooth and nail, but where there is a will, there is a way. You can have confidence that our President has a strong character and sense of conviction, he remarked.

Nigerians would eventually recognize the President’s “noble intentions for the country,” according to Shettima.

The topic of gasoline subsidies will be brought up directly. The sooner we act, the better,” he declared.

Shettima stated, “We are going to collapse it into one,” when referring to the harmonization of the foreign exchange rates. These are therefore the two major elephants in the room, and as time passes, we will reveal our objective.

He’s going to reveal his plans because, as I’ve always maintained, a ship can never have two commanders. He is the head of state and the military’s commander in chief. Vice President is who I am. The degree of your commitment to the President closely relates to your relevance.

“I’ve been friends with this gentleman for well over ten years, and we’ve worked closely together. You may be sure that we will collaborate effectively as a team and a family for the benefit of our country.

He asserted that President Tinubu is prepared to redefine what modern governance entails, promising to provide the necessary leadership while also pleading with Nigerians to support him and his administration.

He will provide the lead, I want to reassure Nigerians. In order to see to the fulfillment of the Nigerian dream—a Nigeria that every black man in the world should be proud of—we will unite around him, support him without reservation, and remain faithful to him, he stated.