Fears over new petrol price hike

There is growing concern across Nigeria over an imminent increase in the price of petrol, otherwise referred to as PMS. This product is the major fuel used across Nigeria for transportation, and numerous other business activities, which are powered through generator sets. The escalating cost of petrol, since the removal of subsidy by President Bola […]

There is growing concern across Nigeria over an imminent increase in the price of petrol, otherwise referred to as PMS. This product is the major fuel used across Nigeria for transportation, and numerous other business activities, which are powered through generator sets.

The escalating cost of petrol, since the removal of subsidy by President Bola Ahmed Tinubu in his inaugural speech on May 29, 2023, has worsened the cost of living crisis in Nigeria.

The average pump price of a liter of the product in Lagos is N610 while it goes for N660 in Abuja and neighboring states in the North Central geopolitical zone.

In North West states like Kano, Sokoto, Zamfara and Jigawa, petrol sells for up to N700 per litre.

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Importers quit

Meanwhile, the independent marketers who have started importing fuel about four months ago have now stopped, saying that it was no longer profitable to import and sell the product at the current landing cost.

This situation has prompted fears of a possible price increase. The seeming imminent price hike is largely driven by the rising cost of crude oil in the international market, the weakening of the naira against the dollar, and the high cost of distributing petrol within Nigeria.

“So, if you consider the cost of diesel, dollar and other international factors, the price of petrol in Nigeria should be around N1,200/litre, but the government is subsidising it, which to an extent is understandable,” the Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr, Ukadike Chinedu, told The Punch.

The Nigerian National Petroleum Company (NNPC) Limited, which had hitherto been the sole importer of products, has however, said in a statement yesterday that there is no increase in the price of petrol, and is urging Nigerians to avoid panic buying, saying that there is “ample availability of PMS across the country”.

A statement signed by the Chief Corporate Communications Officer of the NNPCL, Olufemi Soneye, said: “The Nigerian National Petroleum Company Limited (NNPC Ltd) assures the public that there is no imminent increase in the cost of Premium Motor Spirit (PMS), commonly known as petrol.

“NNPC Ltd urges Nigerians to disregard unfounded rumours and assures them that there are no plans for an upward review of the PMS price”, it further assured.

As at press time Wednesday, however, there are no signs that the petroleum company’s assurances have assuaged the apprehension about the possible price hike.

Sources in the oil and gas industry said the NNPCL clashed with petroleum marketers IPMAN over the removal of subsidy on petrol.

Daily Trust had in an exclusive report published on September 21, 2023 broke the news about the return of the subsidy regime after President Tinubu’s famed statement of May 29, 2023 that “subsidy is gone”.

There were attempts to deny the report about the return of the subsidy within government circles. However, critical stakeholders like the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have confirmed the Daily Trust’s exclusive report.

PENGASSAN’S National President, Festus Osifo, on October 6, insisted that the Nigerian government had restored the subsidy on petrol, despite the official government policy of ending the subsidy regime.

Osifo, who is also the president of the Trade Union Congress (TUC), while featuring on a Channels Television programme, Politics Today, said due to the cost of crude oil in the international market and the exchange rate, the government still pays subsidies on petrol.

“The government has to come clean. In reality today, there is a subsidy because as of when the earlier price was determined, the price of crude in the international market was somewhere around less than $80 a barrel. But today, it has moved to about $93/94 per barrel for Brent crude. So, because it has moved, then the price (of petrol) also needed to move,” Osifo said.

In its reaction to Osifo’s statement, the NNPCL said the Nigerian government has not resumed payment of subsidy on petrol.

“No subsidy whatsoever. We are recovering our full cost from the products that we import. We sell to the market and we understand why the marketers are unable to import,” Kyari told State House correspondents on October 9 after a meeting with the president at the Presidential Villa, Abuja.