The Nigerian National Petroleum Company Limited (NNPC) recently announced its search for Operations and Maintenance (O&M) companies to bid for the Warri and Kaduna refineries. This move comes at a time when many Nigerians were still battling with hardship orchestrated by the hike in the pump price of Premium Motor Spirit (PMS),  following the removal of fuel subsidy by President Tinubu on the day he was sworn into office. Despite initial hopes for a reversal, the Federal Government has exacerbated the situation by increasing the pump price of PMS again, further straining the livelihoods of Nigerians and threatening the survival of businesses across the country.

NNPC admitted to the challenges in importing fuel due to an $8 billion debt, which has contributed to the recent hike in fuel prices from N600 to N855 per litre. If NNPC that is a government-owned entity is selling at such rate, one can only imagine the rate at which independent marketers might sell. In fact, some filling stations are already selling fuel at prices above N1,200 per litre. To worsen it all, the problem is not only the price, but the scarcity of the product itself. This raises a critical question: Why does a country like Nigeria, blessed with crude oil and other natural resources, continue to face such persistent issues of fuel scarcity and inflated prices?

It is very clear that when refineries are privatised, they will be purchased by those in power with the country’s resources. Such a move might simply transfer control to influential individuals or groups, potentially exacerbating the situation rather than improving it. The risk is that privatisation could lead to even higher costs for consumers, as those in power may exploit the resources for personal gain, rather than addressing the systemic issues in the fuel sector.

If the Federal Government’s intentions were truly aligned with improving the situation, a priority would be to fix the Nigeria’s refineries and put a stop at spending fortunes on the importation of refined oil. This importation has left the country with a debt of over $6 billion to foreign refineries and their refusal to continue processing, has significantly contributed to the rising cost of PMS. By investing in and revitalising local refineries, the government could reduce reliance on imports, lower costs, and potentially stabilise fuel prices, benefiting both consumers and businesses.

The Federal Government assured the Nigerian Labour Congress that there would be no further increase in the pump price of fuel, which led to the acceptance of a N70,000 minimum wage. However, the agreement was breached just a month later, resulting in a betrayal of trust. Additionally, the abysmal increment in the minimum wage has significantly diminished in value due to its reduced purchasing power. This situation feels like a case of giving with one hand while taking back with the other, as the cost of living continues to rise despite the wage increase.

The Federal Government needs to recognise that the increase in the pump price of PMS is the cause of the overall high cost of living in the country. Despite the removal of the subsidy over a year ago, Nigerians have not felt the developmental impact on any sector. Things are not getting any better, and the country continues to accumulate debt. One can only wonder where all the generated revenues are being channelled.

The Federal Government’s directive for traders to reduce prices is seen as hypocritical given the impact of the fuel subsidy removal on the cost of production, importation, and transportation. Business owners, aiming to make a profit, cannot afford to sell goods below their cost price. The government should focus on revitalising local oil refineries and avoid privatisation, while also working to reduce the pump price of petroleum products. This approach could help alleviate the significant hardship Nigerians are facing. If macroeconomic costs continue to rise, the situation may reach a breaking point for many citizens.

The primary role of government is to ensure the welfare and security of its citizens. Any policy that is intended to improve people’s lives but fails to do so can lead to chaos and distress, hence needs to be revisited immediately. The current situation, where people feel suffocated and the government appears disengaged from addressing their concerns, reflects a serious failure to uphold this fundamental responsibility.