Fuel subsidy removal : Nigeria sneezes, ECOWAS catches cold

By MAURICE ARCHIBONG, who was in Benin, Togo & Ghan
Passengers stranded at Aflao Station, near the Togo/Ghana border
Although the impact of Nigeria’s ongoing strike over fuel subsidy removal on the world oil market remains unclear, the ripples of the country’s shut-down is being felt across the member nations of the Economic Community of West African States (ECOWAS).

 Since January 1, when the Federal Government withdrew the so-called subsidy on petrol, sending the pump price for a litre skyrocketting from N65 to N140 and beyond in some instances; Nigeria has not been the same. And, like an infectious flu; many nations in the West African sub-region are now afflicted by Nigeria’s malady.

 For example, a young Beninois man is planning to trade-in his state-of-the-art electric motorcycle for a bicycle. Now, why would a young man want to dispose at a give-away price, of an eye-catching Rabbit brand motorcycle, which he bought with the equivalent of over N80,000 a few months ago, for a bicycle?
 The man, who gave his name simply as Kouassi, reached this decision after spending more than two hours last Friday on a queue at one of Cotonou’s filling stations! To make matters worse, after waiting over 120 minutes before he could get his turn at the pump; Kouassi discovered that, at the official pump price of 570CFA (roughly N200), the 3,000CFA (N1,050) he budgeted to spend on re-fuelling his motorcycle could only pay for roughly five litres.

 Until the January 1, 2012 hike in petrol pump price in Nigeria, Kouassi and countless other Beninoise bought their fuel from roadside traders. Those days, at 300CFA (N105) per litre, Kouassi’s 3,000CFA normally paid for 10 litres at the roadside fuel merchants’. In the past, Kouassi needed to re-fuel every four days; but, since he could only get five litres this time, he would need to re-fuel in another 48 hours or so. Aside from having to spend more money for less petrol, Kouassi is also worried that every visit to any filling station would cost him hours as well. He has, therefore, decided to sell his motorcycle and buy a bicycle that only requires pedalling to take him wherever he wants to go.

 Across Cotonou, the economic capital of Benin Republic, many roads are almost empty nowadays. Developments in Nigeria are responsible for the scanty human and vehicular traffic on the streets of Cotonou and other major settlements in Benin Republic. Along Avenue Steinmetz, and major roundabouts like Etoile Rouge and Carrefour La Beninoise as well as other roads in this city, long queues of anxious fuel buyers can be found at every filling station. And, the scenerio is similar in every other major settlement in this country formerly called Dahomey.

 Countless motorists and Cotonou’s fleet of both private and commercial automobiles, it seems, are scattered around different filling stations in long queues. Interestingly, most fuel station workers can’t remember the last time they witnessed such a large crowd of buyers because until penultimate week, virtually every vehicle owner, private user and commercial operators alike, bought petrol and diesel from roadside dealers. The roadside traders offered a litre of petrol at 350CFA (roughly N130), whereas the same volume of fuel sold for 570CFA (about N200) at regular filling stations.

 Practically every roadside fuel dealer got their supply from smugglers that brought in petroleum products from Nigeria, where until January 1, 2012; the price of a litre of petrol was N65 (less than 200CFA). Today, the table has turned: roadside traders sell a litre of petrol at 800CFA (N280 approx), against the roughly N200 per litre price still applicable at official fuel stations.

 So, with the exception of those under pressure from time, practically every other motorist now buys at regular filling stations. Due to the large crowd and long queues, people spend as long as two hours or more before getting their turn at the fuel pump. Notwithstanding the time lost to long queues, most Beninoise folks prefer waiting to wasting money. Such is the impact of fuel price hike in Nigeria on living in Benin Republic for you.
 Indeed, Benin Republic is not the only country convulsing from the hike in petrol pump price in Nigeria.

 Inhabitants of Togo, immediate neighbour to the west of Benin, also feel the pinch. Even in Ghana, Niger Republic and as far away as Burkina Faso; none is immune. Truly, when Nigeria sneezes, ECOWAS catches cold.
 The ripples of Nigeria’s temporary shutdown is being felt along the Abidjan-Lagos Corridor, where the usual millions of commuters that daily shuttle the Nigeria to Ivory Coast route, through Benin Republic, Togo and Ghana; has literally pared down to a trickle.

 Unlike the hitherto rush-rush flow of travellers, the situation at many motor-parks in the sub-region nowadays is that bus and taxi operators have to wait for hours to find enough passengers to fill their vehicle’s seats. It is worth noting that the passenger traffic has been made more skeletal by increments in fares introduced by commercial vehicle operators since the hike in petrol price came into effect in Nigeria.

 In the face of sharp drop in demand, you’d expect fares to drop; but, this is not the case: taxi and bus drivers have hiked fares in response to “Withdrawal of fuel subsidy” in Nigeria. Until late December, 2011; the fare for travelling from Mile 2 to Seme, Nigeria’s border with Benin Republic, was N400/N600 by bus/taxi. From January 1, 2012 this fee rose to N600/N1,000 in a bus/taxi. From Seme to Cotonou, the fare ranged between 600CFA and 1,000CFA (roughly N250 to N350) depending on whether the car is a nine-seater station-wagon or six-passenger salon. Today, the journey to Cotonou from Seme attracts between 800CFA/1,200CFA (about N280/N400).

 The fare for a journey from Cotonou to Hilla Condji, Benin Republic’s border settlement adjacent to Togo; has similarly risen: The current rate is 2,500CFA/3,000CFA (N850/N1,100 approx) in bus/taxi; against the previous 1,800CFA/2,500CFA (N630/N850). From Hilla Condji to the Togolese capital, Lome, the old fare regime of 800CFA/1,000CFA (N250/N350) has also been toppled. The going rate is 1,000CFA/1,500CFA (N350/N520).

 Just beyond Lome, stands Kodzoviakope which leads to the Ghanaian frontier town of Aflao. From Aflao to Accra, capital of Ghana, the fare used to be between 9Ghcedi (about N900) to 16Ghcedi (say N1,600), depending on the state of bus or taxi. Expectedly, passengers that chose to ride in the 9cedi buses could not expect a very comfy trip, whereas the 12cedi buses are fitted with air-conditioner. The upper limit of 16cedi applied to taxis. Today, all that has changed.

 Departing from Ghana last Friday, we ran into anxious passengers who practically jumped into a far-from-sleeky bus for a fare of 13cedi to Accra. The taxi fare on this route had also jumped to 20cedi. From the Ghanaian capital Accra, the journey to Ouagadougou, capital of Burkina Faso, used to extract a fare of 36,000CFA.
 But, since January 1, this year; a higher fare of 45,000CFA has been in effect. Interestingly, the Professor John Atta Mills-led government of Ghana introduced a new price for petrol on New Year’s Eve. A gallon of petrol now sells for eight Ghana cedi, instead of seven cedi until December 31, 2011.

 Interestingly, like his Nigerian counterpart, the Ghanaian President, Prof John Atta Mills, also dropped the bomb of fuel pump price increment on New Year’s Eve! And, you can’t help but wonder: Dr. Jonathan went through an election last year and can afford to chastise his people, but with presidential election looming in Ghana, Prof Mills may have taken a wild gamble.

 In any case, Ghanaians have not gone on strike; everyone, it would seem, is going about their business until poll time, when many would seize the opportunity to take their own pound of flesh… Across Nigeria, crowds of protesters have kept police busy since Monday, January 9. Organised labour ordered workers to down tools penultimate Monday, in reaction against the hike in petrol pump price from N65 to N140. The Federal Government of Nigeria claims petrol pump price should be left to find its level in the face of market forces. Unfortunately, it would seem that Nigerians are unimpressed and unconvinced by government’s explanations and have chosen to either stay home or invade the streets and select public spots in anti-government rallies.

 Rising from a crucial meeting with government representatives last Saturday, January 14, Nigeria Labour Congress (NLC) President Abdulwaheed Omar told reporters that the meeting was not deadlocked: “But, we have not reached a compromise”. Alluding to rumours that oil industry workers were planning to launch their own strike, the NLC president said the second strike threatened by oil industry workers has been put on hold. Nigeria is a key producer of crude oil in the world and a second strike by oil sector workers could affect the international price of crude.