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Buhari’s Big Dilemma: Petrol Subsidy Or Price Hike

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Nigeria is currently facing a fuel price crisis, and President Muhammadu Buhari is clearly in a dilemma about how to tackle it. He is torn between two choices: reintroduce petrol subsidy or allow the pump price to rise.

When Obinna Ajayi-Ciroma (not real name) stumbled on the news on Friday morning that petrol price had been increased to N212 per litre, he immediately decided to dash into a nearby market.

“I had to run to the market to buy some foodstuffs because I know the increase in petrol price will push up food prices,” the 30-something-year-old bachelor, who has been working so hard to eke out a living, told me over the phone.

Ajayi-Ciroma said the significant rise in food prices in the past year partly due to petrol price increases had taken a huge toll on his disposable income.

From 13.86 per cent at the start of 2020, food inflation hit a record 20.57 per cent in January this year – its highest level since the National Bureau of Statistics began the Consumer Price Index series. In May 2015, when Buhari came to power, food inflation stood at 9.78 per cent, the NBS data showed.

The Lagos Chamber of Commerce and Industry warned in February that rising food prices would see most low- and middle-income households spend more on food commodities, with little amount to save and/or invest.

“Persistent rise in food prices, if unresolved, would worsen Nigeria’s poverty situation, thereby pushing more Nigerians below the poverty line,” it said.

The news of petrol price hike on Friday came on the heels of the release of a new pricing template by the Petroleum Products Pricing Regulatory Agency. It sparked a furore. Fury flowed like a fountain.

The public outrage was so palpable that #FuelPriceHike instantly trended on Twitter. The news triggered panic buying of petrol, and fuel queues resurfaced in some parts of the country. Motorists and other petrol users rushed to filling stations to buy the product before price adjustments by the marketers.

The PPPRA template showed that the pump price of Premium Motor Spirit (petrol) was expected to range from N209.61 and N212.61 per litre this month, up from N162-165 per litre.

Following the widespread outcry, the Nigerian National Petroleum Corporation tweeted that morning, “NNPC insists no increase in ex-depot price of PMS in March.”

The PPPRA later deleted the template from its website and issued a statement, saying the guiding prices it released did not translate to an increase in the pump price.

“Even though market fundamentals for PMS in the past few months indicated upward price trends, the pump price has remained the same and we are currently monitoring the situation across retail outlets nationwide,” it said, adding that consultations with relevant stakeholders were ongoing.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, had on February 9 said Nigerians should prepare for the pain associated with the increase in crude oil price.

I think petrol price remains a highly sensitive topic in the country not because Nigerians love cheap petrol but because successive governments have failed miserably to improve the lot of most Nigerians; in fact, many have been impoverished in recent years amid worsening economic woes.

In May 2016, the Buhari government increased petrol price from N86 per litre to N135-145 and put an end to fuel subsidy. That action was not met with much opposition because the President, who was just one year in office, was enjoying massive goodwill. What’s more, Nigerians were desperately in need of a solution to the months-long severe fuel scarcity that faced the country at the time.

While that move helped to resolve the lingering fuel scarcity and ended petrol subsidy to private marketers, it failed to encourage the marketers to resume petrol importation. Foreign exchange scarcity and rising oil prices were said to have made them steer clear of importing the product.

The NNPC gradually became the major importer, and then the only entity supplying the product into the country. But with the continued rise in oil prices amid government’s unwillingness to further increase petrol price, subsidy reemerged. The NNPC, which was bearing the cost of subsidising petrol on behalf of the government, dubbed it “under-recovery”.

Many stakeholders continued to make a case for total removal of subsidy and full deregulation of petrol price to curb the corruption associated with the subsidy regime, tackle the smuggling of cheaper petrol from Nigeria to neighbouring countries, encourage the badly needed investment in refining and transform the dwindling fortunes of the downstream petroleum sector.

In March last year, the Buhari government decided to bite the bullet and eliminate the subsidy. It was easy to do that because the COVID-19-induced oil price collapse had significantly reduced the landing cost of petrol. The government reduced petrol price to N125 per litre as the oil crash had pushed the expected open market price of imported petrol below the official pump price of N145 per litre.

Apparently oblivious of what could follow that surprise price reduction, many Nigerians cheered the government. But that price cut is now seen by many as a poisoned chalice.

To my mind, the government itself did not envisage that the price of oil would rebound as fast as it has done in recent months. After slight further reductions in April and June, petrol price rose four times in the second half of the year – from N121.50-123.50 in June to N140.80-143.80 in July, N148-150 in August, N158-162 in September and N163-N168 in November.

From $23.98 per barrel on March 19 when the government announced the price reduction, the price of the global oil benchmark, Brent crude, rose to $46.84 at the end of November. It increased further in December and closed the year at $51.22.

Contrary to marketers’ expectations, the Federal Government announced a N5 reduction effective Dec. 14 after a meeting with officials of labour unions. The development ran counter to the government’s pronouncements and policy on deregulation.

In September, Sylva had said the government could no longer continue to subsidise petrol, and had stepped back in fixing the price of the product as market forces would determine it.

The price of oil continued its upward trend this year, rising above $70 per barrel on Mar. 8 for the first time in over 14 months. But petrol price has not been adjusted to reflect the upturn in oil prices.

Some have argued that rather than allowing petrol price to go up, the government should use part of the increased oil export revenue brought about by the significant rise in oil prices to subsidise petrol.

But the commitments the government made to the International Monetary Fund and the World Bank while seeking loans last year make a return to the subsidy era very unlikely.

Before the approval by the IMF of the country’s request for emergency financial assistance of $3.4bn, the government had said in a letter of intent to the fund that the recent introduction and implementation of an automatic fuel price formula “will ensure fuel subsidies, which we have eliminated, do not reemerge.”

It was reported in August that the World Bank was unlikely to approve a much-needed $1.5bn for Nigeria that month as planned because of concerns over desired reforms, with fuel subsidies said to have been discussed. While announcing the approval of loan on Dec. 15, the bank said the country had to make “tangible progress on key challenges and pursue some bold reforms” to realise its long-term potential.

Buhari is, no doubt, stuck between the devil and the deep blue sea. Will he push ahead with the deregulation of the downstream sector and allow market forces determine petrol price? What would he do to make long-suffering Nigerians agree to stomach another hike in petrol price?

●’Femi Asu, a business and economic journalist

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Spotlight

World’s First Surviving Nonuplets Visits Italy To Appear On A TV Show

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In December 2022, aged one and a half years old, the world’s first surviving nonuplets went on their first plane flight.
They travelled from Morocco, where they were born and lived for 19 months, to their parents’ home country of Mali.

And now, two months shy of their third birthday, the nonuplets have made their first trip to Europe, visiting Italy to appear on our televised talent show Lo Show dei Record!

We bet it feels so beautiful to see them all grow and wish them the very best 🥳

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News

Picture Of The 17-Year-Old Hawker Who Was Shot Dead By The Police, Which Led To Wuse Market Fire Saga Yesterday

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Yesterday, Angry youths set parts of the popular Wuse market in Abuja on fire over the killing of a 17-year-old hawker simply identified as Musa.

The office of the Abuja Markets Management Limited (AMML) inside the market as well as some cars parked at the market’s car park were reportedly affected.

It was gathered that a suspect who was being tried at the mobile court in the market attempted to run away, but was allegedly shot and killed by the police.

A senior official of the AMML, who pleaded for anonymity, confirmed the incident.

He said the suspect was already convicted of a crime which was not mentioned and in the process of taking him to court for another offence, the boy bolted and tried to run when he was shot by the police. The AMML official said that was what provoked the attackers to burn down some shops, the office of AMML and some vehicles.

The situation caused a stampede in the market as people rushed to save their property.

It is not clear how many people were injured in the stampede as people scaled the fences while some pushed their way through the few gates available. But so many shops and goods got destroyed by the fire.

The After maths of the fire
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Foods

Court Case: Between Chioma Egodi And Erisco Foods, Still On The Defamation Of The Product “Nagiko Tomato Mix”

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How Chioma Egodi’s False Accusations Prompted Erisco Foods to Defend Its Reputation.

On this matter, A social commentator by the name Ebuka Amos, Has this in writing;

UNVEILING THE TRUTH AND EXPOSING THE LIES.

Did Chioma Egodi Review Erisco’s Nagiko Tomato Mix or Was She On A Mission To Destroy Erisco Foods And Run It Out Of Business? Be The Judge

On September 17th, 2023, Chioma Egodi Jnr in a facebook post on her timeline made the following statement;

“I went to but (buy) Tin Tomatoes yesterday that I will use to make stew, I didn’t see Gino and Sonia, so I decided to buy this one, (referring to Erisco Nagiko tomato mix), I decided to taste it omo! Sugar is juat (just) too much! Haaa biko let me know if you have used this Tin tomato before because this is an ike gwuru situation!”

The said post generated lots of reactions from her followers and facebook users; below are some of the reactions:

One Blessing Okeke responded “Stop spoiling my brother’s product, if you don’t like it use another one than bring it on social media or call the customer service of Erisco Foods Ltd” Chioma Egodi Jnr, responded to Blessing Okeke by writing “help me advise your brother to stop ki***ing (killing) people with his product, yesterday was my first time of using and its pure sugar. Tueh!

Lets look at that response in a proper perspective. Is that response still product review or product destruction? She just alleged that Erisco’s product is killing people. This is a very serious allegation and where and how did she get the information that the product is killing people? (is this a product review?). Be the judge. More so,

One Amaka Love Amaobi responded by writing “my sister thanks for updating us Dalu nne” (now based on Chioma Egodi allegation, this person will never use Erisco’s products again and moreso, through the word-of-mouth advert which is the most effective form of advert, she will spread this allegation to multiples of people)

One Don Kashking responded: Pls can we now spoil the product? And Chioma replied him by stating “done already bro,…The above statement is a clear conspiracy from Chioma Egodi and syndicate to destroy, damage and wreck the brand, Ersico.

They have moved from product review to product destruction.

Apart from the comments above, there were many more comments suggesting that the Erisco Nagiko Mix is a bad product and people should avoid it. Interestingly, there were many positive reviews from some of the users of the products, who gave positive reviews of the products and blatantly condemned what Chioma Egodi was doing. They cautioned Chioma Egodi that what she was doing was not a review but deliberate act to destroy Erisco Foods and it’s products.

Chioma responded to them by the write up below;

“@followers about my post yesterday concerning the sugary Tin Tomatoes, my inbox has seen a lot ooo, pls help me tell these persons to avoid me. I only ask if anybody has used it to give their honest opinion but these people is attacking me on my inbox that I am spoiling business for their brother, pls it’s enough stop it. We can take this matter to court oo if you want.”

You can see that Chioma was the first person that talked about going to court.

So, why the outcry now that the matter is in court? Furthermore, an interesting observation from the conversations on the comments section of her post is that she abused those that had positive comments about Erisco Nagiko Mix and made thumbs up (supported) for those that criticized it.

More so, some people advised her to pull down the post that she’s destroying someone’s business but she blatantly refused. It became evident that the intent and purposes of Chioma Egodi was not to review the product but was out to destroy it.

It was further evident that she was hired to destroy the product using her platform. Erisco Responds To Chioma Egodi’s AllegationWhen the management of Erisco Foods Ltd was notified about the post by Chioma Egodi, they enquired from there customer relations department if there was any official complaint from her on their product, they found none. They reached out to Chioma Egodi through a third party requesting her to bring the product she claimed to buy for verification to ensure if wasn’t a fake one, but she declined.

The management had no choice than to defend its reputation as the tense situation already generated a campaign of calumny to boycott Erisco’s products.Prompt Corporate Response Erisco Foods, aware of the weight words carry in the digital era, especially when concerning public health, took these accusations seriously.

The company, recognizing the potential harm such statements could have on consumer trust and public safety, responded promptly. They maintained that their product was safe, adhering to all health and safety standards, and that Egodi’s claims were not based on factual evidence.

The company further reached out to Chioma Egodi to bring the used Tin of the Nagiko Tomato Mix she tasted that was full of sugar or send the product batch number and production date so that the company can be sure it was their product she was talking about and not a fake one. Chioma declined all entreaties. Erisco then decided to use the legal route to clear its name.

Legal and Police Involvement Given the gravity of the claim that a food product was endangering lives, Erisco Foods Management petitioned the Police on a complaint of Criminal Conspiracy, de-marketing and blackmail of killing people by an organized body. That’s how the Nigerian police became involved. The police invited Chioma Egodi for investigation on the strength of Erisco’s letter. Chioma Egodi’s Apology.

During the Police investigation, Chioma Egodi offered and penned a remorseful apology with a promise of retraction as well as posting the apology on her page.

“I sincerely wish to apologize to Erisco Foods Limited for the post I made on Facebook about their product Nagiko Tomatoes mix. I am truly sorry for the product. I am fully sorry sir. I regret my actions and wish to be forgiven. I pledge that this type of bad behavior will never happen again. I undertake to retract all my earlier post on this matter immediately. This is without any compulsion. I will do everything within my power to rectify the mistake and wrong concerning the matter. All the things I told wrongly about the damage done to the company, its customers and the general public. Once again, I am very sorry for the offense.”

Chioma Failed To RetractOn the grant of bail, Chioma failed to retract her false allegation and started a campaign of calumny against Erisco Foods, saying she was forced to write the apology. The implication of this is that she still stands by her statement that Erisco Nagiko Mix is killing people.

Evasion After Bail Recall that based on the understanding that Chioma will use the same medium she used to allege that Erisco Nagiko Tomato Mix was killing people, to use same medium to retract her statement, Chioma was released on bail with a condition she will be available to complete peaceful settlement process. Instead of following through with her obligations agreed on, she reneged on the conditions of her release and continually jumped bail given to her by the Police.

Severing ties with the lawyer who had initially represented her in Abuja, and a relation that signed her bail bond. Chioma turned to Inibehe Effiong, leaving a trail of unanswered questions and legal challenges in her wake.

She equally made herself incommunicado making it impossible for the police to serve her with the court processes and refused to appear in court severally, which prompted the Judge to mandate Inibehe Effiong to produce her in Court at the next adjourned date.

Affirmation of Product SafetyThe Nigerian regulatory agencies gave its update on the status of Erisco Nagiko Tomato Mix for consumption.

1. NAFDAC.NAFDAC with its mandate to safeguard public health released a statement: “Update on the Registration Status of Nagiko Tomato Mix. The product in question – Nagiko Tomato Mix by Erisco Foods Limited with NAFDAC Registration Number A8-7430 is a registered product. The formulation of tomato paste and ketchup products with sugar is safe for consumption.”

2. The Lagos State Government’s Consumer Protection Agency, LASCOPA, weighed in with its findings: in its public statement, “LASCOPA SAYS NAGIKO TOMATO FIT FOR CONSUMPTIONContrary to claims made by one Mrs. Chioma Egodi on Facebook about the state of a tin tomato product named NAGIKO Tomato Mix 400g, the Lagos State Consumer Protection Agency, LASCOPA has declared that the product is safe for consumption and does not pose any health hazard to the consuming public.

A statement signed by the General Manager of LASCOPA, Afolabi Solebo said the certification by LASCOPA about the product follows the outcome of the laboratory tests which the product was subjected to upon the complaint from the consumer.

According to him, to authenticate her claim, LASCOPA had embarked on an independent investigation by inviting Erisco Foods Limited, the producer of the product and Egodi to two different meetings held on the 3rd and 10th of October, 2023.

In his words, “The outcome of the meetings informed the decision of LASCOPA to request for samples of the product which were subsequently taken to the laboratory for test and analysis as well as to ascertain the conformity of the sets of parameters of the product samples to establish if the product is safe for consumption or otherwise”.

“It must be noted that two samples of the product were taken from Erisco Foods Company and another two sets of samples were obtained from a market survey by LASCOPA to balance and ensure a true reflection of the state of the product from both the company and the market.

“The laboratory analysis of the two sets of samples collected for Microbial and Physicochemical tests showed that the product passed all the tested parameters and it is safe for consumption based on the outcome of the test conducted”, he added.

Interestingly, the product has been in the market since 2010, duly certified by Standards Organisation of Nigeria and NAFDAC and no issue of complaint has arisen since inception.Wrong Perception in the Court of Public Opinion The case of Chioma Egodi versus Erisco Foods Limited reverberated through the court of public opinion, a forum often swayed by sentiment and emotions rather than facts.

The discourse surrounding the incident highlighted the need for a balance between freedom of speech and the accountability that must accompany public declarations, especially when they concern the health and well-being of consumers.

Now, we’re left with deep questions that touch our hearts and make us think about what’s really going on. Why is Chioma working so hard to ruin a company’s good reputation, a company that has been feeding countless families for years?What makes a person ignore the damage they could do to the people who rely on that company for their jobs?

It could be deduced from the foregoing that the goal was never to review the product, but instead about causing so much trouble that the company might close down?These questions make us think about the kind of community we want.

Do we want to live in a place where people can make big accusations without proof, putting hard work and jobs at risk? Or do we want a community where we solve problems by talking, looking at the facts, and finding the truth?

This story about Erisco Foods and Chioma isn’t just about a fight between a company and one person. It shows us what we value, what we stand for, and the future we want to create.

Let’s not get carried away by false claims and narratives. Instead, let’s look for the truth with open hearts and minds. It’s not just about Erisco; it’s about our honesty and how we care for our community.

Credit: Ebuka Amos, Social Commentator.

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