With the rumour mill agog with the news of the planned fuel pump price hike by the members of the independent petroleum marketers few days ago, there are clear and present dangers of a return to arbitrary price fixing by the coming weeks.

Amidst the joy and excitement of the festivities, not a few Nigerians were taken aback by the news of the proposed price hike of petroleum from its current N600 to N1, 200, a remarkable 100 percent increase.

The news sparked immediate reactions, with many expressing concern about the impact on their already-strained budgets.

“My daily transport already eats up a quarter of my salary,” Adeola Owoye, a staff in one of Nigeria’s commercial banks said on X, formally known as Twitter. “If this hike happens, then what? Walking to work isn’t even an option with the distance and safety concerns.”

In the view of Obinna Umelo, a dispatch rider in Lagos, lamented what he described as the dire consequences the planned pump price will cause him, most especially given the fact that his business depended on mobility.

“There is no way I will be able to cope with the new price hike, at least not in the immediate or foreseeable period,” he stressed.

“I don’t see how I’m going to cope with my daily hustle as a dispatch rider because already things are pretty difficult. This new price will compound the already worse situation,” he added.

It would be recalled that similar speculations that the government had partly reintroduced petrol subsidy, unannounced, to keep the pump price at N617 given the continued fall in the value of naira against the dollar and the price of crude oil in the international market.

For instance, Festus Osifo, the national president of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, on October 6, insisted that the Nigerian government had restored the subsidy on petrol, despite the official government policy of ending the subsidy regime.

Osifo, who is also the president of the Trade Union Congress (TUC), one of Nigeria’s two largest workers union coalitions, while featuring on a Channels Television programme, Politics Today, said due to the cost of crude oil in the international market and the exchange rate, the government still pays subsidies on petrol.

“The government has to come clean. In reality today, there is a subsidy because as of when the earlier price was determined, the price of crude in the international market was somewhere around less than $80 a barrel. But today, it has moved to about $93/94 per barrel for Brent crude. So, because it has moved, then the price (of petrol) also needed to move,” Osifo said in October.

Nigerians throw shades at rumour mill

Expectedly, the news drew a lot of spats from concerned Nigerians, who argued that the people were already overstretched and totally impoverished, as such would be unable to endure any more belt-tightening measure of any kind, least of all hike in pump price.

Former federal lawmaker, Shehu Sani; has warned those peddling the rumours of premium motor spirit being sold for N1200 to stop causing unnecessary tension in the country.

Recall that the Nigerian National Petroleum Company Limited, NNPCL, and fuel marketers under the aegis of the Independent Petroleum Marketers Association of Nigeria clashed last Tuesday over the removal of subsidy on petrol.

The depreciation of the naira against the US dollar at both the official and the parallel market has not been helpful too.

For this reason, oil marketers said Premium Motor Spirit was increasing in recent times,

However, the NNPC maintained that it was recovering its full cost on the importation of petrol.

There are rumours that oil marketers are fighting for the PMS to sell for N1,200/litre in a free market mainly because of the crash of the naira against the dollar.

Sani, who represented Kaduna Central Senatorial district in the 8th Assembly, further stressed that people should stop spreading the rumours since nothing is official from both the NNPCL and the marketers.

“Neither the oil marketers nor the NNPCL proposed any increase of pump price to N1200 per litre,” he wrote on X.

“Those peddling this rumour should stop so as not to cause unnecessary panic, disruptions and further hardships and suffering,” he said.

However, some Nigerians are calling on the government to be proactive in sensitising its citizens.

Also, Nigerian netizens on X (previously Twitter) have raised concern about the Nigerian government’s alleged plan to raise petrol pump prices to N1,200 per litre across the country.

There has been widespread speculation that the Nigerian National Petroleum Company Limited (NNPCL) will soon announce new hikes in fuel pump prices across the country.

However, X users say that worse economic hardship looms if the government and the NNPCL should increase the fuel price as speculated.

A user, identified as Yanju said that previous experiences had shown that implementation of any policies in Nigeria always started like a rumour.

He said, “This was how they increased it to 600 without much fuss. They’ll do it again and again. And whenever we’re about to complain, they’ll throw in the ‘refineries will soon start working card.”

“You can’t tell me that the Nigerian economy doesn’t encourage fraud. How do you expect a guy earning even 200k a month to live with Fuel 1200? New year, New problems,” another user, DREYLO said.

According to Stes_Giddy, any further increment of fuel prices by President Bola Tinubu’s administration would affect the country’s small-scale economic sector.

He said, “Guy why do you dare go far? 200k ke? There are sales girls and boys who earn less than 50k and they pay rent and transport to the island every day. As a business owner, I sell Chandeliers, I have to run gen from morning to night to display samples to customers.”

Nick’s Pizza said pegging the pump price at N1,200 should be considered a lack of empathy from the government on the current struggles Nigerians are currently facing to survive.

He said, “You even mentioned 200k, it’s only about 40% (according to stats) who earn that amount or close in this country. A lot of people and family men earn less than that in a month. How does the government expect them to survive.”

“If NNPC can’t manage the petroleum affair of the nation, can they just scrape them off or just privatise the ministry so those who have something to offer can take over? Wtf is fuel 1200 in 2024? Do these people really understand the level of hardship Nigerians are going through,” another user, Omotayo said.

NNPCL rules out fuel price hike

As the rumour mill gained traction, the Nigerian National Petroleum Company Limited (NNPCL) in a statement ruled out an increase in the price of Premium Motor Spirit (PMS) also known as petrol.

According to the media minder of the oil corporation, Mr. Olufemi Soneye, he urged Nigerians to disregard rumours of an increase in the pump price of petrol.

He assured Nigerians that there were no plans for an upward review of the price of petrol.

The spokesman, however, said the company did not have any dispute with IPMAN over any subsidy payment on petrol contrary to the claim.

“Motorists nationwide are advised against engaging in panic buying as there is presently ample availability of petrol across the country,” he added.

IPMAN also recants

Amid rumours of an impending scarcity and increase in the cost of the PMS, which has triggered panic buying amongst Nigerians, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned Nigerians against panic-buying and storing of petrol at home.

In a monitored TV programme on Channels Television on Thursday, Okanlawon Olanrewaju, the Public Relations Officer of IPMAN, while making an appearance clarified that fuel marketers have no intentions to raise fuel prices.

“As far as the independent marketers are concerned, we don’t have plans or plans to increase fuel pump price.

“There is no basis for that for now. There is no signal from NNPC that we should increase. So, we cannot do that on our own except NNPC comes out and says we are going to increase pump price. On our own, there is nothing like that.

“I want to use this opportunity to appeal to the public to stop panic buying. There is nothing like that (fuel price increment). It is just a rumour,” he said.

Hope rising for local oil processing

Stakeholders in the Downstream Petroleum sub-sector have assured Nigerians of a significant reduction in the pump price of fuel, indicating optimism that the ongoing crises in the energy sector will soon be resolved.

They specifically anticipate a drop in petrol prices with the expected resumption of operations at the Port Harcourt Refinery in Rivers State in January.

Kenneth Korie, the National President and Chairman of the Board of Trustees (BoT) of NOGASA, along with Dr. Billy Harry, his PETROAN counterpart, made these assurances separately after the inauguration of the Akwa Ibom State chapters of the two industry regulatory bodies at Ibom Icon Hotel in Uyo, Akwa Ibom State, recently.

Expressing confidence, they stated that they are 100 per cent sure that the prices of petroleum products will decrease when the refineries become operational again in January.

Korie attributed the current hike in fuel prices to importation and added that the rehabilitation and upgrade of the refineries in Port Harcourt, Kaduna, and Warri are crucial for lowering product prices.

“Yes, of course, there is hope. The GMD NNPC has given assurance concerning that before the National Assembly. In all my talks, I have been hammering the Port Harcourt Refinery to come online,” Korie said.

“I’m 100% sure that there will be a serious reduction in the price of petroleum products as soon as our four refineries, including the Dangote Refinery, come up. But we should not expect the price to come down like it was before, because of the high exchange rate, but it will be a bit lower than what it is now.”

While commenting on the state of the economy in the last few months, Peter Sunday Adebola, Managing Director, Edgefield Capital Management Limited, an investment-driven firm, said the government is tackling the problem besetting the country headlong despite the challenges it is confronting.

According to him, the current economic managers have shown the propensity to turn things around in the system judging by the raft of policy pronouncements they have made in recent times.

Citing the revamped Port Harcourt Refinery, he said, “If Port Harcourt Refinery I and II is working, then that means we would import less fuel and if we do that it is going to enhance our foreign exchange earnings capacity. Then again, another thing is the Dangote Refinery has also come on stream too. It has received some crude oil for prospecting.”

Refining capacity, he reiterated, “Will increase the pressure on our reserves and increase in food production if people can go back to their farms. Then we are going to see the kind of hope that this administration is promising us.”

According to the forecast by BMI, a Fitch Solutions company, Nigeria’s real GDP growth will increase modestly to 2.9% in 2024, up from 2.4% in 2023.

The BMI is particularly upbeat about the possibility of the country making a lot of gains from the production at Dangote Refinery.

“Given that Nigeria will produce 1.62mn b/d of crude in 2024, there will still be a significant surplus available for export. Furthermore, long-standing contracts with international buyers and the need to maintain relationships with key trading partners – including the US, EU, and India – will mean that large volumes of crude will continue to be sold on the international market, preventing a downturn in overall exports. All told, we forecast that growth in exports of goods and services will soften from 19.3% in 2023 to 6.7% in 2024.

“Real GDP, % chg 2.4 2.9 Economic growth in Nigeria will improve modestly in 2024, primarily due to the operational start of the Dangote refinery. That said, Nigeria will continue to underperform by both Sub-Saharan Africa and emerging market standards as a result of high inflation, tight financial conditions, and fiscal constraints.”

Nigeria amongst countries with cheapest PMS

Nigeria has been ranked as the sixth country with the cheapest price of Premium Motor Spirit (PMS) popularly known as petrol in Africa and the 22nd globally.

This is according to a new report released recently, 2024 has shown.

Nigeria’s average petrol price stands at $0.722 equivalent to N657 according to the report.

The report by Global Petrol Prices titled Gasoline Prices; Octane-95 listed Libya as the country with the cheapest petrol price in Africa at $0.031 (N28.35).

Other African countries with cheap petrol prices include Algeria, $0.342 (N311); Angola $0.362 (N329); Egypt, $0.403 (N366); Sudan, $0.700 (N637); and Nigeria $0.722 (N657).

On the global index, Nigeria was listed as the 22nd country with the most affordable fuel prices.

According to data compiled by Global Petrol Prices and presented on a chart in the report, as of January 2024, Iran has the world’s cheapest gasoline at just $0.029 (N26.52) per litre, while Hong Kong has the highest price at $3.101 (N2,835.77) per litre.

Several major oil-producing countries, including Libya, Venezuela, Kuwait, and Saudi Arabia, enjoy very low domestic fuel costs. Iran tops the list at $0.029 (N26.52), followed by Libya at $0.031 (N28.35) and Venezuela at $0.035 (N32.01).

“The average price of gasoline around the world is $1.29 per litre. However, there is a substantial difference in these prices among countries.

“As a general rule, richer countries have higher prices, while poorer countries and the countries that produce and export oil have significantly lower prices. One notable exception is the U.S., which is an economically advanced country but has low gas prices.

“The differences in prices across countries are due to the various taxes and subsidies for gasoline. All countries have access to the same petroleum prices of international markets but then decide to impose different taxes. As a result, the retail price of gasoline is different,” the report noted. (The Nation)

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