Fuel Subsidy Removal Fallout: Expect To Pay More

Telecoms subscribers in Nigeria have been told to expect to pay more as a fallout of the recent fuel subsidy removal action by the government.

Of course, that is to be expected.

The President of ALTON (Association of Licensed Telecoms Operators of Nigeria), Gbenga Adebayo, had this to say:

“Reason being that even though the core of our power is generated by the use of diesel, all other support services are dependent on the PMS.

“Therefore, with the increase in the cost of PMS, it is foreseen that it will also affect the cost of doing business, meaning that it will affect the cost of network operations as well.”

I submitted this line of reasoning to someone just yesterday and he shut me up. But this is simple common sense. The cost of running any business simply goes up, even if that business is not directly dependent on petrol.

For example, telecoms operators run cars which burn petrol, and also purchase from the same market that will have experienced spiralling costs from all angles. How can their operations not be affected?

we will see how this plays out. But do think about it: all the gains of the last one year in terms of tariff reductions are about to disappear with this singular action of the federal government.

Have your say, dear friends!

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0 Thoughts to “Fuel Subsidy Removal Fallout: Expect To Pay More”

  1. izi

    I sure saw this coming.

  2. fortespy

    there was so much effort by the major players in the telecom industry last year to ensure the tarrifs were reduced to the bearest minimum which eventually paid off. this year that achievement was meant to be sustained not to be truncated… i pray it doesnt get to that

  3. Eye.Bee.Kay

    Why are the telecoms guys being pre-emptive / presumptuous?

    Anything can still happen concerning the astronomical fuel price increase.

    That said, while one is not privy to their running cost structure, it is claimed that their most significant cost is diesel.

    So- even if the high petrol price is retained, i do not anticipate a (major) increase in the tarriffs..

    The problem would be- who would bell the cat – jerk prices up first? Would the others emul8 the move?

    By the way, i heard AirTel is exploring the possibility of using splar energy in powering their cell sites. This should be a great initiative…

  4. Harry Echemco

    Yes, there is every possibility that tariff may go up because of this subsidy removal but I’m also hoping that the ongoing price war would help to check such a move.

    Just like Eye.bee.kay said, issue would be, who will increase their tariffs first. It is only MTN that I’m sure can afford to take such a dicey step first, given their subscriber base and their natural tendency of being mean.

  5. bosun99uk

    I certainly will not pay more, I will only reduce my consumption to meet their new price.

    Meanwhile, the MTN Group posted its biggest two-day decline since January 2009 after Nigeria’s government removed fuel subsidies, cutting consumer spending power.

  6. Eye.Bee.Kay

    Fuel Subsidy Removal Fallout:

    full text of the National broadcast by President Goodluck Ebele Jonathan on the deregulation of the downstream sector

    http://dailytimes.com.ng/article/national-broadcast-president-jonathan

  7. bosun99uk

    @Eye.Bee.Kay

    That was quite thoughtful of you.

    But the link says Page Not Found. Please reconfirm.

  8. fortespy

    @bosun.. the page opens.. i read it

  9. belushi

    MTN will surely take the first step of jacking the prices up. Other will follows but thread softly. Either way, whichever network that gives the best value at most reasonable price wins my subscription.

  10. hon abiolanzy

    i think this guyz a making more money they should be able to bear the cost

  11. bosun99uk

    @fortespy

    Well, clicking the link gives me page not found.

  12. tonardo

    yes they should reduce some promo,… And bear d cost .
    Most promo aren’t real sha!
    Never d less there ll always be COMPETITION,…..

  13. jikong1

    The removal of PMS subsidy is a welcome development,though the initial challenges are inevitable but we have to make sacrifices for us to correct some anomalies. The N1.3 Trillion used for fuel subsidy in 2011 is outrageous, much of these subsidized fuel are smuggled to neighbouring African countries. Fuel subsidy is a policy and not a law.

  14. bosun99uk

    Just don’t say this when you get to a petrol station where people are grumbling about the price.

    Go tell the poor man on the street that he has to suffer more so as to stop the already very rich man from stealing.

  15. Surajudeen264

    In my view any increament in the tariff might go a long way in increasing the already unbearable hardship on Nigerians. The reason being that the spending power of many Nigerians has been drastically reduced and as a result; many people will want to fall back to their mobile networks to carry out some transactions (moreso that there is internet banking now), cut down expenses on certain business meetings, execute some important family obligations or give business directives just by giving few instructions on phone to the person at the other end.
    From the aforementioned, I foresee more money been diverted from the Transport sector to the Telecom sector if they do not make any increament in their tariffs. In fact any increament at this time may further stiffen the necks of Nigerians and can lead to unforeseen Rev… Who knows?
    What we may not expect at this time is the further crash in tariff price.
    God Please Save Nigerians from the Shackles of this Devlish Cabals!

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