As the price of Premium Motor Spirit (PMS), commonly known as petrol, surges to unprecedented levels, independent oil marketers across Nigeria are selling the product for as much as ₦900 to ₦1,000 per liter. This sharp increase has left many Nigerians grappling with the rising cost of living, particularly as state-operated filling stations under the Nigerian National Petroleum Company (NNPC) offer the same product at significantly lower prices, ranging between ₦568 and ₦617 per liter. The stark price difference has caused long queues at NNPC stations as citizens scramble to save money on fuel.
In response to the growing public outcry over these exorbitant prices, the Federal Government has issued a stern warning to independent marketers who engage in price gouging. Through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Federal Government has vowed to shut down any Filling Station caught selling petrol at inflated rates. The NMDPRA has also stated that it is unethical for marketers to exploit Nigerians by profiteering from the sale of PMS. Independent marketers, however, have defended their pricing, claiming they purchase petrol from private depots at prices as high as ₦850 per litre, which forces them to sell at higher rates.
NMDPRA to Shut Stations Selling Petrol Above ₦650/Liter.
George Ene-Ita, the spokesperson for NMDPRA, challenged this assertion and insisted that official depot prices reported to the regulatory body are considerably lower. He stated that the agency regularly monitors depot prices and finds no justification for the steep prices being charged by some independent marketers. Ene-Ita further stressed that the NMDPRA would take swift action against any filling station found guilty of overcharging customers. He assured the public that the NNPC sets a standard ex-depot price and collaborates with the regulatory authority to determine reasonable profit margins.
Therefore, any price exceeding ₦650 per liter is deemed unacceptable, and the agency is prepared to shut down non-compliant stations. Of course, the ongoing fuel crisis in Nigeria has created an opportunity for some marketers to increase their profit margins. Due to a shortfall in supply from the NNPC, private depot owners have hiked their prices, passing the cost onto independent marketers who then sell to consumers at inflated rates. These marketers, unable to obtain fuel directly from the NNPC at the lower price of about ₦570 per liter, are forced to pay up to ₦850 per liter, leading to the current situation where petrol is sold at prices ranging from ₦900 to ₦1,000 per liter.
Fuel shortage hikes prices, spurs black market across Nigeria.
The shortage of fuel has also had a significant impact on daily life across the country. In Osogbo, Osun State, for instance, independent marketers are selling petrol for between ₦900 and ₦1,000 per liter, while major marketers offer it at ₦700 per liter. The resulting scarcity has caused many filling stations to remain closed, and those that are open have seen a 50 percent increase in transportation costs due to the high price of fuel. Similarly, in Damaturu, Yobe State, petrol prices have reached ₦980 to ₦1,000 per liter, with a similar situation unfolding in Lagos and Ogun states. The reluctance of many marketers in Kano State to open their stations despite having fuel in stock has fueled the growth of black markets, where petrol is sold at even higher prices.
Despite these challenges, some industry insiders believe that the situation could improve if the NNPC ramps up its supply of petrol. However, they acknowledge that the current crisis is exacerbated by the lengthy delays in obtaining fuel from the NNPC, which can take up to a month after payment is made. This delay, coupled with the high interest rates on bank loans used to purchase fuel, has put significant financial pressure on marketers, further driving up prices. The Federal Government’s decision to prioritize the Federal Capital Territory, Abuja, in its distribution efforts has led to a slight easing of queues in the capital.
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However, the supply remains insufficient to meet the nationwide demand, and it remains to be seen whether the government’s threats to shut down errant filling stations will lead to any significant change in the pricing landscape. As the fuel crisis continues, it is clear that both consumers and regulators face an uphill battle in restoring normalcy to the market. The NMDPRA’s ongoing efforts to monitor prices and shut down non-compliant stations are crucial, but without a substantial increase in fuel supply, the situation is unlikely to improve in the near term.