Petrol prices in Nigeria are witnessing a surge, ranging from N660 to N700 per litre across various states, as reported by Infostride News on Monday, December 18. The increase in fuel costs is attributed to multiple factors, with the yuletide season exacerbating the upward trend.
A critical driver behind this surge is the removal of fuel subsidies, a move that has rendered petrol prices more responsive to market dynamics. The ongoing foreign exchange crisis in Nigeria is playing a pivotal role, posing significant challenges to independent fuel marketers attempting to import petroleum products independently.
Independent fuel marketers are grappling with the complexities of the foreign exchange crisis, making it increasingly difficult for them to procure petroleum products without relying heavily on the Nigerian National Petroleum Company Limited (NNPCL) for supply. Despite assurances from the NNPCL regarding ample stock availability for the Christmas season, fuel marketers find themselves compelled to raise pump prices to align with escalating costs.
The transportation of petrol from states equipped with loading depots to those lacking such facilities further contributes to the overall price hike. This discrepancy in facilities is reflected in the divergent petrol prices observed across different states. Infostride News gathered the following petrol pump prices on Monday, December 18:
– Lagos State: N550 to N620 per liter
– Jos, Plateau State: N670 per liter
– Uromi, Edo State: N680 per liter
– Maiduguri, Borno State: N680 to N700 per liter
– Ebonyi State: N670 per liter
– Kano State: N680 per liter
These variations in petrol prices underscore the impact of logistical challenges and regional disparities in fuel distribution, contributing to the disparate costs experienced by consumers nationwide.
The volatility in petrol pump prices suggests that they may not remain constant as Christmas Day approaches. A businessman in Kano state reported purchasing petrol at N650 per liter on Sunday, December 17, only to discover a 24-hour price increase.
In Borno state, consumers are facing petrol prices nearing N750 per liter a week before Christmas. Notably, NNPCL retail stations across the country are selling petrol within the range of N595 to N617 per liter. In Borno state, some vehicle owners are already paying N700 per liter as of December 18, reflecting a 7.14% difference from the N750 pump price suggested by the World Bank in its latest Nigeria Development Update report released on December 13, 2023.
The World Bank report emphasizes the need for cost-reflective pricing on petrol across the country following the removal of subsidies. It notes a discrepancy in Nigeria’s petrol pricing, indicating that it has not fully adjusted to prevailing market conditions, potentially signaling a partial reinstatement of the subsidy. The observation is rooted in estimating the genuine cost that would accurately mirror the retail price of petrol, considering importation at the official foreign exchange rate.
The ongoing liberalization of the petrol market, amid the influence of parallel exchange rates, significantly impacts pricing dynamics. Under these circumstances, prices could potentially surge even higher. The uniform petrol pricing for all Nigerians is no longer a reality following the subsidy removal. However, an emerging trend in Borno state suggests that certain residents are gradually approaching the point of paying petrol prices more closely aligned with the actual cost, as suggested by the World Bank.
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