According to a sources review of petrol prices on Monday, December 18, it was revealed that petrol prices per liter are silently rising as a result of the yuletide season.
Nairametrics discovered another significant reason behind the recent surge in petrol prices.
This increase is directly linked to the removal of fuel subsidies, which has led to petrol prices becoming more responsive to the prevailing circumstances within the market.
One prominent factor influencing this shift is the ongoing foreign exchange crisis in the country. This crisis has created substantial challenges, making it exceedingly difficult, if not impossible, for independent fuel marketers to independently import petroleum products.
Consequently, these marketers now rely heavily on the Nigerian National Petroleum Company Limited (NNPCL) to supply fuel across the nation.
Despite assurances from the NNPCL regarding sufficient stock availability for the Christmas season, fuel marketers are compelled to raise pump prices to align with the increasing costs.
The transport of petrol from states equipped with loading depots to those lacking such facilities is contributing to this price hike. Notably, this discrepancy in facilities is mirrored in the varying prices observed across different states.
Here are some of the petrol pump prices recorded by Nairametrics 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 differences in petrol prices across states illustrate the impact of logistical challenges and regional disparities in fuel distribution, contributing to the varied costs experienced by consumers across the country.
Petrol pump prices are on a roll
One ongoing trend is that petrol pump prices may not remain the same as Christmas Day draws closer. This is because a businessman based in Kano state who spoke to Nairametrics earlier today, said that he bought petrol on Sunday, December 17 at N650 per liter, only to realize that the price had gone up 24 hours later.
Borno state is paying close to N750 per liter a week to Christmas
However, it is important to note that pump prices at NNPCL retail stations across the country are selling the commodity at between the range of N595 per liter to N617 per liter. In the case of Borno state, some vehicle owners are already buying at N700 per liter as of December 18, which is just 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.
In the report, the World Bank stated that following the petrol subsidy removal, there should be cost reflective pricing on petrol across the country.
The World Bank report highlighted a discrepancy in Nigeria’s petrol pricing, suggesting that it has not completely adjusted to prevailing market conditions, potentially signaling a partial reinstatement of the subsidy.
This observation, based on the World Bank’s assessment, stems from estimating the genuine cost that would accurately mirror the retail price of petrol, considering importation at the official foreign exchange (FX) rate.
Further clarification reveals that the ongoing liberalization of the petrol market exists amid the impact of parallel rates, significantly influencing pricing dynamics. Under these circumstances, the resultant prices could potentially surge even higher.
It is evident that uniform petrol pricing for all Nigerians is no longer a reality following the removal of subsidies. Nonetheless, there’s an emerging trend in Borno state, suggesting that certain residents are gradually nearing the point of paying petrol prices that more closely reflect the actual cost, as suggested by the World Bank.
