Ime Akpan
Nigerians have expressed concern about the incessant increase in the pump price of petrol, saying it would worsen inflationary pressure.
Recall that the National Petroleum Company Limited had on Tuesday, October29, adjusted the pump prices of petrol, raising the retail price of the product in Abuja to N1, 060 from N1, 030 per litre, an increase of N30.00.
This happened barely three weeks after the NNPCL began to sell petrol for N1, 030 on October 9, an increase from N897.
In Lagos, petrol sells N1, 025 per liter at NNPC retail outlets, an increase N27.00 from the former price of N998.
As usual, other major petroleum marketers also jerked the pump prices.
In the northwest, reports say the product sell N1, 070 at NNPC retail outlets while other marketers in Katsina, Kano, Kaduna and Sokoto sell between N1, 120 and N1, 500 per litre.
In the north central, the price is between NN1, 060 and N1, 100 at NNPC stations, while others offer the product for between N1, 300 and N1, 500.
Reports say motorists in Adamawa State in the northeast pay N1, 300 for a litre of petrol.
In the south-south, NNPC sells petrol for N1, 300 per litre fin Bayelsa State while black marketers sell between N1, 450 and N1, 500.
In Port Harcourt, Rivers State, other petrol stations sell between N1, 250 and N1, 450 per litre.
In Edo State, NNPC sell at N1, 190 while other filling stations sell at N1300 and above depending on where one buys from.
In the southeast, marketers offer the product for between N1,200 and N1,250 in Onitsha for instance while NNPC sell at N1,100.
In the southwest, the price at both the NNPC and other private petrol station is slightly different above N1000 in the urban centres but above N1, 150 on the outskirts like Ikorodu, Badagry, Agege, Badagry, Epe, etc in Lagos.
Recall that petrol price in the country was N197 per litre until President Bola Tinubu announced offhandedly on May 29, 2023 that “fuel subsidy is gone.”
Consequently, marketers raised petrol price to between N448 and N557 per litre within 24 hours, a 185.64% increase. The federal government defended the hike, explaining that the subsidy, which cost over N400 billion monthly, was no longer sustainable.
Barely a month later, in June 2023, the price of petrol rose again from N557 to N617 per litre, an increase of 10.77%. NNPCL attributed the hike to market dynamics.
The third increase was announced on September 2, 2024, with prices jumping by 45.38% from N617 to N897 per litre.
NNPC attributed the adjustment to financial difficulties, including high debts to petrol suppliers. The fourth increase was announced on October 9, 2024 when the price was hiked from N897 to N1, 030.
Switch to CNG or perish! – Tinubu
As Nigerians grapple with rising fuel cost and the ripple effect it has on their purchasing power, President Bola Tinubu said the citizens have a choice to either pay N1, 000 for a litre of petrol or use a cheaper alternative – compressed natural gas (CNG) at N200 per standard cubic metre.
The president made the offer when he met with the executives of the Nigerian Independent Petroleum Company (NIPCO, led by the director, Mr Ramesh Kasangra, at the State House in Abuja Tuesday, according to a statement issued by the president’s spokesman on information and strategy.
“Nigeria’s motorists can buy petrol at N1, 000 per litre or equivalent gas per standard cubic meter at N200. We have also introduced incentives for commercial motorists to convert from petrol to gas” free of cost,” he told his guest.
President’s comment in bad taste
The president’s comment “Nigeria’s motorists can buy petrol at N1000 per litre or equivalent gas per standard cubic meter at N200” has been described as “insensitive.”
The Punch in its editorial said “it was the most insensitive and apathetic thing a leader would say to his people in the throes of agony.”
It continued: “The Tinubu government is driving a compressed natural gas policy as a cleaner and affordable energy solution. It’s a good idea. For the moment, however, CNG is as problematic as petrol.
“The first challenge is converting vehicles already running on petrol or diesel.
“The second is the cost of the conversion which is put at over N1 million.
“How many commercial motorists can afford this amount? A conversion explosion in Edo State sent safety fears across the country but it was put down to the use of substandard materials by unqualified hands. It will help if the government will get, say, the banks, to defray conversion costs.
“Tinubu’s claim that the government has provided free conversion for commercial motorists is not verified.
“The third problem is scarcity. There is said to be about 50 conversion centres in the country, most of which are in the state capitals. What is the fate of vehicle owners in towns and smaller communities?
“A fourth issue is the age of vehicles on the roads. Experts say CNG is not suitable for vehicles older than 10 years. This is a red flag. Fitting CNG into the old and rickety vehicles on the roads, especially commercial buses, is potentially dangerous.”
Stakeholders raise concern
Watchers of indiscriminate hike in the price of petrol are concerned that the trend would further heighten inflation which quickened to 32.7% in September 2024, up from 32.2% in the prior month.
Contributing factors, according to the National Bureau of Statistics (NBS) include the depreciation of the naira and the increase in transportation prices (27.2% vs 25.7%) following hikes in fuel prices since early September.
Reacting to the latest increase in the price of petrol, the national vice president, Nigerian Association of Small-Scale Industrialists (NASSI), Mr Segun Kuti-George, said the hike worsen hardship and increase the cost of production in the country.
“It will increase the cost of production, which will in turn increase prices of goods and services. Hence, it will drive inflation up further and will increase the cost of local goods, hence people will resort to foreign goods if they are cheaper than local goods, and this would lead to further collapse of local industry,
“The cost of goods will go up, the cost of transportation will go up and that would affect the prices of food, which will mean further hardship to the people,” he said.
For the national president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Mr Dele Oye, the recent petrol price hike will reinforce inflationary pressures that are already affecting all aspects of life in the country.
He called on the Tinubu administration “to prioritise the stabilisation of the naira as a means of mitigating inflation and supporting the economic circumstances of everyday Nigerians.”
Without such a foundational approach, he said “we will find ourselves trapped in a cycle of escalating prices, diminishing purchasing power, and an increasingly challenging business environment.”
He added: “As the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, we feel compelled to address the recent decision by the Nigerian National Petroleum Corporation to increase the price of Premium Motor Spirit from N998 to N1, 025 in Lagos and N1, 060 in Abuja.
“While we understand the complexities of the market and the need for adjustments, we must lament the broader implications of this decision.”
The NACCIMA president stated that despite the recent reductions in international crude oil prices, Nigerians do not benefit from it due to the endless depreciation of the naira.
“This persistent decline in the currency’s value is largely a product of poor management and ineffective monetary policies by the Central Bank of Nigeria, which means that any global price relief is negated by rising domestic fuel prices.
“The correlation between the value of the naira and the international crude oil market prices is undeniable. Until this relationship is addressed, we will continue to bear the burden of escalating costs,” he added.
He further said the administration’s decision to raise fuel prices may be seen as necessary within the current economic context.
However, he said NACCIMA was not comfortable with the approach due to its adverse effects on businesses and consumers alike.
He added: “The increased fuel prices will undoubtedly lead to higher transportation fares, further straining household budgets and increasing the cost of goods and services across various sectors.”
For the director general of the Nigeria Employers’ Consultative Association (NECA), Mr. Adewale-Smatt Oyerinde, the increase in the price of petrol, notwithstanding its justification, has the potential to further erode the purchasing power of Nigerians, while putting more pressure on both the organised and unorganised businesses.
“There’s no gainsaying that petrol remains the predominant source of energy for many sectors, including transportation and household uses. Thus, this new increase will further distort the cash flow potential of many, leading to likely increase in the general cost of living,” he said.
Also founder and chief executive officer of Centre for Promotion of Private Enterprises (CPPE), Dr. Muda Yusuf, said the latest increase in the price of the product is regrettably ill-timed and does not reckon with the prevailing difficult economic conditions in the country.
He said the government needs to consider the welfare of Nigerians in policies surrounding energy prices.
The former director general of the Lagos Chamber of Commerce and Industry (LCCI) stressed the need for social, economic, and political considerations in policy choices and warned against prioritising commercial considerations.
He stressed that there is always a place for political economy in the interest of the vulnerable segments of society.
“The Nigerian economy is not ripe for full-blown deregulation and market principles on all fronts. The social costs of such policy choices are typically very high. This is an economy with very weak social safety nets where over 100 million people are wallowing in various variants of poverty.
“The Nigerian economy is highly vulnerable to volatilities in energy prices and the exchange rate. Those two volatilities need to be carefully managed by the policymakers. As far as possible, those volatilities should be significantly moderated or reduced,” he said.
Yusuf added: “Even within the context of the economic reform agenda, we (policy makers) should be conscious of ensuring a balance between commercial, fiscal and social objectives.
“Those three are critical to an economy that will make progress sustainably and (policymakers ought to) take the need for inclusion into consideration.
“You need to be careful to not have an economy that leaves too many people behind. Social considerations in the economic policy process are as important as fiscal and commercial considerations
“That balance is very important. The government needs to commit a lot more to reducing these two critical volatilities.”
Come and take petrol – Dangote tells marketers
The Dangote Petroleum Refinery has frowned upon the continued importation of petrol by oil marketers and NNPC despite the fact that the commodity is produced in-country by the $20 billion Lekki-based plant.
Speaking when he, alongside the minister of finance, Mr Wale Edun and the group chief executive officer of NNPC, Mr Mele Kyari met with Tinubu in Abuja, the president of Dangote Group, Mr Aliko Dangote, he expected the NNPC and other petrol marketers to buy from his company.
“I have a refinery; I’m not in retail business. If I’m in retail business then you can hold me responsible. But what I’m saying is that the retailers should please come forward and pick (petrol). If they don’t come forward and pick, what do you want me to do?
“So, I am expecting either the NNPCL or the marketers to stop importing; they should come and pick because we have what they need. And as they
Scramble for Dangote petrol heats up
In response to the Dangote challenge, the Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN) said they were ready to patronise the refinery.
They said they had in the past approached the refinery to express the interest of their members in lifting refined products from the plant.
The Punch newspaper quoted the PETROAN president, Mr Billy Gillis-Harry, to have said that despite the letters his association wrote to the company, “there has never been any positive response, rather, all we get from them is that they repeatedly say to us is that they repeatedly say to us that ‘we will meet.”
“We have listened to him (Dangote) and as far as I’m concerned what he said is very strange to my hearing. PETROAN had written to him since 2022, we wanted to have a business meeting with him and understand the business dynamics,” PETROAN President, Billy Gillis-Harry, told one of our correspondents.
“I sent the same letter to him (Dangote) today (Wednesday) to ask for a meeting, so, we can determine the modality of business. We cannot drive our tankers into the Dangote refinery to start buying products just like that. We must have a business meeting to determine the modalities, make our inputs and compare notes.
“We are willing to patronise Dangote but cannot do it in the air. We have to sit down and have a productive business meeting with him that is transparent enough. That is the challenge. So, we are willing but we can’t just fly into the plant and start loading products,” he said
He wondered at what point the company would be ready to meet with the association.
“We never met. So, at what point are we going to meet and conclude the business? Let Nigerians know that PETROAN is willing to buy from him.
“If he has 500 million litres, we are willing to be one of the off-takers, for with the size of our membership and retailers scattered across the country, we are a very productive business mix that should be good for him. So, he also has the job to woo us and to get us to work with him,” Gills-Harry said.
Similarly, the national president of IPMAN, Mr Abubakar Maigandi, raised concerns over difficulties faced by IPMAN members in accessing fuel at the Dangote Refinery despite a N40 billion down payment made through NNPCL.
Speaking on Channels Television programme, Maigandi expressed surprise at Dangote’s statement claiming the refinery had 500 million litres of petrol in stock and ready to supply the nation.
“If the refinery truly has 500 million litres, then there should be no reason our members couldn’t load after four days. We are willing to buy the product directly if the refinery is ready to sell to us, but for now, our members can’t access, it even after paying,” he said.
