Perilous Effects Of Current Regime Of Discriminatory Petrol Prices In Nigeria, By Anayo M. Nwosu

Perhaps the governors of the southeast, south south and northern states where petrol is sold above N145 per litre seem not to have realized the great disservice they are doing to their states’ economy by allowing their citizens to be cheated economically.

Don’t they know that the brunt of N26 per litre under recovery (the new name for fuel subsidy) is borne by all arms of the government.

The losses from fuel under recovery are deducted by NNPC from its revenues before crediting the federation account.

Why would a state governor keep quiet while fuel is sold at N145/litre in Lagos and Abuja while his people buy fuel at disadvantageous price?

Don’t they know the economic implications?

The entire 35 states subsidize the petrol consumption of Lagos and Abuja residents even though about N32.7bn is monthly under recovered from federal account.

While their states get reduced federal allocation, the extra cost of pump price above N145/litre reduces the disposable income of the citizens of the state in question. That is, the extra fuel costs eat into money available to the residents to spend on other items on the need list. This impacts on the income and purchases of other goods in the states.

Smart state governors should push for deregulation of the entire Petroleum Downstream sector in that no state has to subsidize the consumption of other states’ residents.

With deregulation, nobody would care if Katsina State Government (not Federation Govt) jointly builds a refinery with Niger Republic. Just like the refinery being built in Anambra would ameliorate the sorrows of the residents.

For now, Nigerians are at the mercy of government officials working in NNPC whose best effort was to silence the vocal Lagos and Abuja residents with near adequate supplies and then do business with other states.

As if the government who should stem this has accepted the current practice as normal, the pump price of petrol increases as one moves away from Lagos and Abuja.

And nobody seriously cares. Must Obasanjo write about it?