The price of petrol in Nigeria, otherwise colloquially known as Premium Motor Spirit (PMS) may hit a high of N320 ($0.77) per litre in October.
This comes as the country’s Federal Government has concluded its plans to remove subsidy on petrol products as part of the ongoing implementation of Nigeria’s Petroleum Industry Act (PIA).
According to the Guardian Nigeria, the Nigerian National Petroleum Corporation (NNPC) disclosed last week that it spent a total of around $2.1-billion on petrol subsidy in eight months amid the rise of global oil prices.
The price of diesel in Africa’s biggest economy has also skyrocketed to N350 ($0.85) per litre, as well as the price of Liquified Petroleum Gas (LPG) otherwise known as cooking gas, rising 100% in the past few months, with 12.5kg selling for between N7,500 ($18.14) and N8000 ($19.35).
According to marketers, the price of LPG could see heights of N10,000 ($24.18) before December if the current energy sector crisis is not addressed. This could lead to more Nigerians seeking alternative sources of fuel like charcoal, firewood and sawdust, amongst other sources that are seeing price hikes as well.
What is Causing the Price Hike?
There are a number of factors that are currently determining the petrol, diesel and LPG prices in Nigeria, including the international price of Brent Crude oil, which was at $82.39 per barrel on Sunday. This represents a massive rise in price as the resource was trading at less than $30 per barrel a few months ago.
Another factor is the Federal Government’s PIA, which is set to remove subsidy that has bled Nigeria of over N1.2-trillion ($2.9-billion) in costs since the scheme was reintroduced in 2021. The government’s plan to remove subsidy may provide more money for budget implementation but may also worsen the plight of consumers at the pumps.
Timipre Sylva, Minister of State for Petroleum Resources, said last week that there won’t be an option to fully deregulate the downstream (opening the downstream sector to competition as well as removing entry barriers in the distribution and supply of petroleum products), a move that would increase the current N162 ($0.39) per litre petrol price to about N350.
This comes as the NNPC yesterday appealed to tanker drivers to halt a proposed plan to embark on strike action due to the poor state of Nigeria’s road network as well as the increasing cost of diesel and vehicle spare parts.