Recently, the Nigerian National Petroleum Company Limited (NNPCL) regaled the local media with its sterling financial…

Recently, the Nigerian National Petroleum Company Limited (NNPCL) regaled the local media with its sterling financial results for April. It recorded revenue of N4.97 trillion in the month, up from N2.77 trillion in March. Its profit after tax rose to N481 billion from N276 billion a month earlier.

On their own, these and other performance indicators released by the oil company point to a strong outing by a corporate entity. Growth in both revenue and profit after tax represents an impressive scorecard and reflects a good sense of stewardship on the part of the company’s managers.

Yet, this achievement, when viewed within the broader context of the current economic environment, raises pertinent questions. It touches on the contentious issue of fairness, or the lack of it, in the distribution of the gains and benefits of economic reforms. The celebration by the company stands in stark contrast to the reality facing ordinary Nigerians, whose lives have been significantly altered by the rising cost of energy.

One of the greatest drivers of this inflationary pressure is the energy sector, especially hydrocarbons. Prices of these products began to rise on May 29, 2023, following the now-famous declaration that “subsidy is gone.” With the removal of subsidies, the price of fuel, for instance, has risen by 468 per cent over the past three years.

That subsidy withdrawal marked the launch of the federal government’s economic reforms three years ago. Since then, Nigerians have endured a harrowing experience of steep price increases. The first was the rise in the prices of petroleum products and, indirectly, the broader inflationary spiral triggered by it. From basic foodstuffs to household items, prices have risen beyond the reach of many individuals and families. This situation has been worsened by tensions in the Gulf region, which have further pushed up the prices of petrol and diesel.

Consequently, most Nigerians have been left with no alternative but to ration their meagre incomes to meet whatever fraction of their needs they can afford.

Given the high prices of the products that generated these revenues and profits for the NNPCL, the celebration of these achievements amid the soaring cost of fuel in the country appears misplaced. How does this benefit the average Nigerian citizen? Or is it merely a gain for the elite? After all, NNPCL is now a commercially driven company whose profits are ultimately appropriated by its owners.

In all of this, the average Nigerian remains the loser in the government’s reforms, especially the removal of petrol subsidies. From all indications, the government is receiving substantial revenue from the oil and gas industry, while oil companies, represented by the NNPCL, are also earning billions of naira in profit. Clearly, this leaves most citizens bearing the burden of a high-cost economy.

A cursory look at how some countries have responded to the energy crisis arising from tensions in the Gulf region shows how unfairly the government has treated Nigerians. Some countries have refused to raise petrol prices, choosing instead to absorb the additional costs. In Singapore, the government has announced that it will issue $500 vouchers to citizens this month to help them cope with cost increases expected from the Middle East conflict. These vouchers were originally scheduled for January 2027, but the payment was brought forward. In addition, the Cost-of-Living Special Payment will be increased by $200 for eligible citizens earning up to $100,000 annually and owning no more than one property.

In Nigeria’s case, NNPCL, a commercially driven company, is announcing with glee revenue of N13 trillion in four months and a monthly profit after tax of N276 billion amid deepening energy poverty in Africa’s leading oil producer.

In a country where the national oil company is raking in such enormous profits, many citizens continue to suffer. Poverty has increased, in part because of rising energy costs. Many households have reverted to using firewood and charcoal for cooking because they can no longer afford LPG, which currently sells for about N1,700 per kilogramme. Diesel sells for about N2,900 per litre. All these factors are negatively affecting households and businesses.

The argument that these prices are purely market-driven is unacceptable. Nigeria is one of the world’s leading oil producers, and its citizens should not be subjected to this level of hardship amid abundant natural resources.

Daily Trust hereby calls for a review of the government’s policy on the energy sector. The implementation of the three-year-old reforms should be reconsidered with a view to achieving a fair balance in the sharing of both the costs and benefits.

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