One of the first policies of the Tinubu administration was the removal of the subsidy on premium motor spirit (PMS), also known as petrol. Since its implementation, the price of fuel has more than tripled, with marketers threatening another hike due to difficulties in sourcing dollars in the parallel market. As the Federal Government has outlawed the official bank exchange rate, the unification of both the official and the black market rate has added to its further surge.
Now, the retail price of automotive gas oil, also known as diesel, has taken a hit, surging in some filling stations in Lagos and Abuja. With inflation reported at 25 percent, the price hike would inflict more pressure on household income and increase the cost of operation of businesses. Investigations by the media show that a liter of diesel crossed the N1,000 mark in filling stations in Abuja, Ogun, Ondo, and Lagos states. At a filling station in Abuja, it was sold for N1,100 per liter. The price remained the same at a filling station along Akute Road, Ifo in Ogun state.
Market forces determine price of diesel to consumers.
An official at the station told newsmen that the price of the commodity was increased due to an upward adjustment in the ex-depot price. Ex-depot price is the price marketers buy products at the depot and it determines the price at which they will sell to motorists. While the product retailed higher than N1,000 in several petrol stations, it was sold less than that at many other stations. At the Nigerian National Petroleum Company (NNPC) Limited filling station, which is located along the Akute road axis, the price of diesel rose from N850 to N950 a liter.
Also, an attendant at the NNPC station blamed the increase on scarcity of the product, adding that the retail outlet was out of diesel for two months, and only recently resumed sales. Speaking with the media, Billy Gillis-Harry, president of Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), said that the spike in the price of the commodity was largely impacted by market forces. “Once the dollar component behaves in a certain way, it will affect the entire system,” he said.
NOGASA urges FG to intervene in the ensuing surge.
Gillis-Harry revealed that that was exactly what happened. He said that everybody was running around to pay for differentials in the price. So, when the depot price is high, consumers will also buy it higher. He said that the ex-depot price was N975 a liter as of the night of September 19, 2023. “That is not the final price. If there is a differential, obviously, it is going to affect the end users as well as the final price and that is what will make it increase,” he said.
On Tuesday, the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) expressed concerns over the surge in the price of diesel. In a statement, Benneth Korie, NOGASA president, said that the rapid increase in diesel prices has made it difficult for suppliers to access products and loans from commercial banks for doing their business. “These rising prices are also evidently causing veritable hardships to haulage transportation and commuters alike,” Korie said. So, he urged the government to intervene before it jeopardizes the predicted growth that the government intends to achieve.
Stats about diesel prices in Nigeria from the NBS.
According to the National Bureau of Statistics (NBS), the average retail price of diesel paid by consumers in December 2022 was N817.86 per liter, which was an increase of 182.64 percent from N289.37 per liter recorded in the corresponding month of the previous year. On a month-on-month basis, this increased by 1.11 percent from N808.87 per liter in November 2022. On state profile analysis, the highest average price of the product in December 2022 was recorded in Ebonyi with N869.25, followed by Bauchi with N860.00, and Ondo with N856.36. On the other hand, the lowest price was recorded in Akwa Ibom with N773.75, followed by Benue with N777.50 and Borno with N785.00. The South West region had the highest price with N841.35, while the South South recorded the lowest price with N798.54.
National Bureau of Statistics: Website