It was anguish, yesterday, as the Nigerian National Petroleum Company Limited, NNPCL, raised the pump price of Premium Motor Spirit (PMS), also known as petrol, by 15 per cent across the country.
The development confirmed earlier reports that plans were underway to fully deregulate the sector and that subsidy would no longer apply from this week.
However, the complete deregulation effect, yesterday, pushed the price of the product to N1,030 per litre, from N897 per litre in Abuja, while the price rose to N998 per litre, from N855 per litre in Lagos.
Checks by our correspondent indicated that the Dangote Petroleum Refinery price also increased by 8.8 per cent to N977 per litre, from N898 per litre, yesterday.
The latest price increase makes it the second time the petrol price has been hiked in the past month.
This showed that the pump price of petrol has risen by more than 411 per cent since President Bola Tinubu came into office in May 2023.
Specifically, from N195 per litre before the President assumed office on May 29th, 2023, the price of the product was increased to N448 (Lagos) and N460 (Abuja) in May 31, 2024; N557 (Lagos) and N617 (Abuja) in September 2024; N610 (Lagos) and N897 (Abuja) in September 2024 before the latest increase to N998 (Lagos) and N1,030 (Abuja) in October 2024.
The latest increase, which came against expectations that the crude-for-Naira deal between the Federal Government and Dangote Refinery might lead to a reduction in the pump price beginning from October 1, 2024 has left many citizens, especially motorists, in anger.
Checks by our correspondents around Abuja yesterday showed that other marketers have also adjusted their pump price upward, with major marketers selling at N1,040 per litre from N926 sold previously. Independent marketers also raised their price to N1,150 per litre.
When our correspondent visited the NNPC Retail mega station in Abuja where the price increase had been effected, shocked motorists lamented the continuing hardship in the country.
“It’s beyond belief. I have been in the queue for almost an hour and I didn’t know they had increased the price. Tinubu is not concerned about our suffering”, a taxi driver, Usman Abah, lamented.
He condemned the lack of information by NNPCL before the price increase was implemented, adding “they are taking us for granted. At the time I joined the queue, I assumed the price was still N897 per litre. I am in shock and confused.”
At a Conoil outlet, opposite the NNPC Towers in the Central Area, Abuja, consumers watched in horror as the pump price was changed in their presence from N926 per litre to N1,040 per litre.
Close by, at the TotalEnergies outlet, the station continued selling at the old price of N926 per litre.
We’re seeing complete deregulation — marketers
Reacting, the Managing Director, 11 Plc (formerly Mobil Oil Nigeria Plc), Adetunji Oyebanji, said: “I believe the price of PMS has finally been deregulated, and subsidy has finally been eliminated.
‘’Henceforth, the price of PMS will be determined by market dynamics. This is inevitable as the government could no longer bear the burden of the subsidy.
“A good measure the government has taken to mitigate the development is the sale of crude oil to local refineries in Naira at a fixed exchange rate. This will protect consumers from the negative impact of the fluctuations in exchange rates.
‘’The fact that the crude will be refined in local refineries will also save the cost of transporting crude to offshore refineries and transporting refined products back to Nigeria.
“Without these two factors, prices would have been higher. Another thing will be that the incentive to smuggle petrol from Nigeria to our neighbouring countries will be greatly reduced. Henceforth, prices can change at any time, depending on market dynamics.
“Customers will make informed choices about where to buy. Operators will need to improve on safety, customer service, and accurate measurement to retain customers. This is also the time for consumers to consider alternative sources of powering their vehicles like CNG.
“The era of full competition has come to Nigeria. With time, things will settle down, and people will make informed choices. The government should invest in mass transportation, especially with CNG buses.
“Greater incentives should be given in terms of duty waivers on conversion kits and other CNG equipment and vehicles.”
However, the Independent Petroleum Marketers Association of Nigeria, IPMAN, has lamented that it costs over N50 million to load a truck of petrol.
According to the Public Relations Officer, IPMAN, Chinedu Ukadike, several independent marketers have shut down operations due to the high cost of capital required to run the business.
Ukadike, however, pointed out that the full deregulation of petrol prices and withdrawal of NNPC Limited as the sole off-taker of petrol from Dangote Refinery will open opportunities for competition among marketers.
“We are ready to compete. We have our tank farm now in Calabar and we’re ready to compete and face the challenges that come from operating in a deregulated sector. We also have plans to acquire more tank farms in other parts of the country”, he declared.
It’s an aberration — NLC
Reacting to the fresh price hike yesterday, the Nigeria Labour Congress, NLC, demanded for immediate reversal, saying NNPC fixing fuel prices in a so-called deregulated sector was an aberration.
NLC asked the Federal Government, led by Tinubu, to immediately reverse the latest hike in petrol prices, arguing that previous increases did not produce any positive results, but only made people poorer.
In a statement by its President, Joe Ajaero, the NLC contended that following the logic of market forces, it was an aberration that a private company, NNPCL, was the one fixing prices and projecting itself as a hegemonic monopoly.
The statement, titled “What next after increase in pump price?” read: “We are dismayed by the latest increase in the pump price of petrol. It looks like the only thing this government is known for is the increase in the pump price of petrol without commensurate capacity of Nigerians or mitigatory measures.
“Even following the logic of market forces, we find it an aberration that a private company, NNPCL, is the one fixing prices and projecting itself as a hegemonic monopoly. We challenge the government to go to the drawing board and present us with a blueprint for inclusive economic growth and national development, instead of this spasmodic ad-hocism and palliative policy.
“It needs no stating the fact that the latest wave of increase has grossly altered the calculations of Nigerians once again at a time they were reluctantly coming to terms with their new realities. It will further deepen poverty as production capacities dip, and more jobs lost, with multi-dimensional negative effects.
“In light of this, we urge the government to immediately reverse this price hike as previous increases did not produce any good results. People only got poorer. But more fundamentally, the government should be bold enough to tell Nigerians in advance the destination it wants to take the country.”
Latest increase regrettably ill-timed — CPPE
On his part, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, CPPE, Muda Yusuf, said: “The latest increase in petrol price is regrettably ill-timed and does not reckon with the prevailing difficult economic conditions.
‘’It is important to stress that social, economic and political considerations matter in policy choices. Commercial considerations should not completely override these considerations. 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 cost of such policy choices is typically very high. This is an economy with very weak social safety nets. Over one hundred million people are wallowing in various variants of poverty.
“There is also the issue of policy sequencing. The present administration has presented an Economic Stabilisation Bill to the national assembly. The bill is expected to bring some relief to citizens and businesses. It would have been better to allow the proposed mitigating measures to be activated and gain traction before coming up with the petrol price hike.
“What the economy needs at this time are measures to ease current economic and social challenges; not policies that would aggravate them.
“It is desirable at this time to urgently cut import duties and taxes by a minimum of 25% on all industrial raw materials, passenger buses of 18 seats and above and cars of 2000cc engine capacity and below.
‘’The customs duty exchange rate should be fixed at a maximum of N1,000/dollar to reduce the current prohibitive cost of imports. Relevant legislation should be amended to that effect. This is without prejudice to fiscal policy measures contained in the Economic Stabilisation Plan.
“The government must be ready to trade off some revenue in the current situation. There is a need to seek to achieve the maximisation of the welfare function for citizens and the productivity function for businesses. The government should not be too fixated on revenue maximisation.”
FG insensitive to the suffering of Nigerians— Udoma
In her own response, Charity Udoma, a rights activist, said: “Increment of pump price of PMS at this time is most unfortunate, senseless and proof that government is insensitive to the suffering of its citizens.
The government just wakes up and makes irrational decisions without wide expert consultations and consideration for the citizens.
“It will only lead to a higher inflation rate in the country which will further lead to increases in cost of transportation, price of foods and other commodities, which will also impact negatively on access to medicals, etc.
‘’It will lead to increase in crime rate and general insecurity, hunger, poverty, poor health increasing sicknesses and high mortality rate.
The insensitivity of the government to the sufferings of Nigerians at this time is most unfortunate and only tends to increase untold hardship on Nigerians which is most uncalled for right now. How can we be suffering amid abundance?”
Untold hardship for workers coming — NCMDLCA
Reacting to the development, Lucky Amiwero, National President, National Council of Managing Director of Licensed Customs Agents, NCMDLCA, said before the latest increase in the pump price of petrol, a lot of people working within and around the ports found it difficult to come to work.
Amiwero stated that with this new price of petrol, a lot more people would stop coming to work as Nigerians would face more hardship.
He explained that fuel is the critical factor that is killing the economy because of the way the government has handled the commodity.
He said: “It is that critical factor that has held the economy down, a lot of people cannot go to work when you go to Abuja now, you cannot move around because of the issue of fuel. In Lagos, it is the same thing.
“It is a high factor that is destroying the common man; a lot of people cannot go to work. If you go to the ports now, you find that the ports are virtually empty. Even when you have jobs to do in the ports, you find it difficult to leave your place and go to the port.
“You increase the fuel price, increased electricity tariff, floated the Naira, everything is increased. The cost of fuel is now at par with electricity.
“Nigeria cannot be exploring crude and producing fuel and you now politicize the fuel.”
Impact’ll be severe on businesses -—ASBON
President of the Association of Small Business Owners of Nigeria, ASBON, Femi Egbesola, said the impact of the hike would be severe on businesses, trigger price increases and reverse the recent easing in inflation.
His words: “While we understand the complex factors that can influence fuel prices, such as global oil market dynamics and exchange rate fluctuations, we are troubled by the lack of prior notice and clear explanations provided by the government and the NNPCL regarding this development.
“The timing of this price hike is particularly concerning; as it has the potential to further exacerbate the impact on businesses and consumers, especially the vulnerable segments of the population and those on fixed incomes, who are still adjusting to the recent increase in the national minimum wage.
“At this point, the current administration should realise that a steep price hike is bound to trigger widespread price increases, potentially reversing the recent easing in the Nigerian economy.
“The immediate impact of the hike in petrol price on businesses will be severe, with fuel prices affecting supply and logistics, power generation, transportation, and factory operations.
“The cost of doing business will skyrocket, prices of goods will rise, and some firms may shut down due to low demand in the face of weakening consumer purchasing power. Of course, this will be followed by job losses.”
It will further erode citizens’ purchasing power —NECA, analysts
Reacting, the Nigeria Employers’ Consultative Association, NECA, said, among others, this new increase will further distort the cash flow potential of many, erode further the real value of the minimum wage and likely increase in general cost of living.
The Director-General of NECA, Adewale-Smatt Oyerinde, said: “The announced increase in the price of petrol, notwithstanding the justification has the potential to further erode the purchasing power of Nigerians while putting more pressure on both organized and unorganized businesses.
“There is 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, further erode the real value of the minimum wage and a likely increase in the general cost of living.”
Also reacting to the fuel price increase, Clifford Egbomeade, Economy Analyst and Communications Expert, said: “One immediate consequence of this price hike will be the increased cost of living. Transportation and logistics, which rely heavily on fuel, will see a surge in costs, driving up the prices of goods and services across the country. This will put additional financial pressure on Nigerians, particularly those already struggling with inflation and rising expenses. For many, the increased fuel cost means higher expenses in their daily lives, from commuting to food purchases, further stretching household budgets.
“Industries that depend on fuel, such as manufacturing, agriculture, and logistics, are also set to feel the impact. Higher operational costs may lead to reduced output, layoffs, or even business closures in extreme cases. For small and medium-sized enterprises and SMEs, this rise in fuel prices could be crippling, particularly in a country where the cost of doing business is already high due to other factors like inadequate power supply.
“Moreover, the broader economic impact cannot be ignored. As the price of essential goods rises due to increased transportation and production costs, inflation is expected to accelerate. This will worsen the economic challenges many Nigerians are already facing, deepening the disparity between income levels and living standards. While the move towards deregulation may foster market competition in the long term, in the short term, the country is likely to experience significant economic disruption.
The public’s response to the increase has already been marked by frustration and long queues at filling stations, signalling growing discontent. This could have political ramifications, as pressure mounts on the government to either provide immediate relief or risk facing protests and unrest. The situation reflects the delicate balance between pursuing economic reforms and managing the social consequences of those changes.”
In the same vein, Analysyt & Executive Vice Chairamn at Highcap Securities Limited, David Adonri said: “There was hearsay yesterday that the government was trying to reduce the price of fuel and to my greatest shock, today the opposite is happening. It is another recipe for a hike in the inflation rate.”
Nigerians being pushed to the wall—ASSBIFI
On his part, the President of the Association of Senior Staff of Banks, Insurance and Financial Institutions, ASSBIFI, Olusoji Oluwole, warned that Nigerians were very angry and being pushed to a boiling point by the increase.
He said: “The sudden increase in petrol pump price is shocking and highly insensitive. This is especially so when a government that has spent one year negotiating a poor minimum wage that has not been implemented is quick to continuously increase fuel prices multiple times.
“This action is capable of creating an avoidable crisis that can lead to anarchy if not well thought out. Nigerians are angry and are being pushed to a point that even organized pressure groups will be unable to stem any reactions.”
FUEL INCREASE 2023 — 2024
Lagos/Abuja
N195/N200 (Before Tinubu came in)
N448/N460 (May 31, 2024)
N557/N617 (September 2024)
N855/N897(September 2024)
N998/N1,030 (October 2024)
Vanguard
