Why Obasanjo’s Administration Increased Price of Petrol Many Times

The pioneer Executive Secretary of Petroleum Products Pricing Regulatory Agency (PPPRA) and immediate past Executive Secretary of Petroleum Technology Development Fund (PTDF), Dr. Oluwole Oluleye has stated that the administration of former President Olusegun Obasanjo reviewed the prices of petrol frequently to reduce government’s subsidy bill and position the sector on the path of full deregulation. Obasanjo had in March 2001 submitted the bill for the establishment of PPPRA to the National Assembly, which was finally passed by the Senate and the House of Representative on February 5, 2003 and May 22, 2003 respectively.

Under the civilian administration of former Obasanjo, the price of petrol was adjusted seven times.

Speaking at a Roundtable organised at the weekend in Lagos by NewsDirect Newspaper, Oluleye stated that Obasanjo reviewed the prices upward regularly to ensure that the subsidy bill was sustainable.

According to him, the subsidy claims rose from less than N300 billion when he was the Executive Secretary of PPPRA to the current figures of over N1 trillion because the government did not increase the price of petrol from 2007 when Obasanjo left to 2012.

He stated that even few days before Obasanjo handed over to the administration of the late President Musa Yar’Adua, he also increased the price of petrol but added that it was unfortunate that the new administration saw it as a booby trap and reversed it.

“He (Obasanjo) believed then that we should be able to deregulate fully within two budget cycles, which was two years but the resistance of the people to that kept it longer. I remember vividly when he was leaving in 2007, there was a price increase. He said that the press would abuse him that he is a bad man and that he has laid a booby trap but he insisted that he must do it for the country. The labour opposed it vehemently and the new government coming in also felt that it was a booby trap and capitulated to labour and it was reversed,” Oluleye said.

“I was telling the government then that once you are not able to gain N1, you are going to lose a lot of money because he

consumption rate was about 30 million litres daily. If you are giving out N1 per litre, that means you are giving out N30 million in a day. If you multiply that by 30 days, you know what it is. That was a lot of money. From that 2007 to 2012, that is, five years, there was no adjustment,” he added. Before Obasanjo assumed power in 1999, General Abdulsalami Abubakar’s administration had increased the price of one litre of petrol to N25 in December 1998 but later reviewed it downward to N20 in January 1999.

Under the civilian administration of former Obasanjo, the price was adjusted seven times.

Obasanjo raised it to N30 in June 2000 but slashed it the same month to N22, following protests by the organised labour.

In January 2002, he raised it to N26 but between June and October 2003, it was N42 per litre. The pump price was further raised to N50 in May 2004; and N65 in August 2004.

However, the most curious adjustment of pump price by the Obasanjo government was the hike from N65 per litre to N75 in May 2007, just few days to the May 29 hand-over date to the administration of the late Yar’Adua.

The late President reduced it from N75 to N65 in June 2007.

The former administration of President Goodluck Jonathan removed the entire subsidy element, increasing the price from N65 to around N140 per litre in one fell swoop in January 2012.