Against the backdrop of a new increase in petrol price, marketers have adopted a wide range of price differentials nationwide with petrol stations owned by the Nigerian National Petroleum Company Limited, NNPCL, among the highest pump prices.
While Vanguard learnt that the latest upward adjustment has fixed the base price at N855 per litre, NNPCL Retail stations, especially in Abuja, are selling at N997, the second highest to some independent marketers selling at N1,018. But outside Abuja and Lagos, some independent marketers were selling as high as N1,300/ltr.
Moving across the cities of Abuja and Lagos, Vanguard saw filling stations displaying different prices with NIPCO adjusting from N700 to N955 per litre, Conoil from N660 to N940 per litre, and independent marketers from N930 to N1,018 per litre.
With the latest upward price review under President Bola Ahmed Tinubu, the price of petrol has now risen by over 355%, from N197 per litre on May 29, 2023, to N897 on September 3, 2024. The percentage increase is nearly 400% when considered the highest pump prices by independent marketers.
The latest increase, which took effect just two days after the company acknowledged owing suppliers approximately $6.8 billion, has triggered widespread condemnation across various sections of Nigerians.
Despite the new prices, queues at filling stations remained long yesterday evening, as many outlets were still without the product. This also fueled a thriving black market, with a litre selling at N1,500 in most locations in Abuja and Lagos.
NNPCL in conflicting messaging
When contacted by Vanguard, NNPC’s Chief Communications Officer, Mr Olufemi Soneye said he was not aware of any price increase.
“I’m not aware of this. Thank you for reaching out. I have no comment on the matter at this time. If there are any updates, I will make sure to inform you. I appreciate your understanding”, he responded via WhatsApp.
An unconfirmed trending message on social media platforms related to NNPCL Retail had earlier hinted of the petrol pump price. The message read: “Good Morning All, This is to inform you that NNPC Retail Management has approved an upward review of PMS pump price from N617/itre to N897/liter effective today, 3rd September 2024.
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“Please ensure all your pumps and totems (price boards)/MIDs reflect the new PMS price of N897/liter. Thank you”.
Dangote fuelenters market
The price hike coincided with the start of petrol supply by Dangote Refinery to NNPC, with NNPC as sole off-taker of the product in the country.
Confirming the commencement of petrol production, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, said the refinery will begin with the supply of 25 million litres of petrol to the Nigerian market.
“The refinery is now poised to supply an initial 25 million litres of PMS into the domestic market this September, and will subsequently increase this amount to 30 million litres daily from October 2024”, the Authority stated.
It also disclosed that NNPC Limited has reached an agreement to start crude oil sales and supply to Dangote Refinery in local currency.
Niger State groans
In Minna, Niger State, Vanguard gathered that the sudden hike in pump price of petrol greatly affected economic activities in the state as transport fares went up considerably.
Pump price at two NNPC mega stations along the Eastern bye-pass were dispensing to vehicles at N890 per litre but with long queues of vehicles waiting patiently for their turns.
However, other marketers most of which were, as at Monday morning, dispensing fuel, shut their stations while those selling were dispensing between N1,200 to N1,300 per litre. The hike led to increase in transportation by 100 percent which subsequently paralysed economic activities in Minna.
IPMAN emphasises product accessibility
Speaking on the development, marketers said while they are not opposed to the price hike, it is important that access to the product is open to all stakeholders.
Speaking to Vanguard,e Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, IPMAN, Chief Chinedu Ukadike, said marketers do not oppose the increase in pump price.
He however insisted that the product be made available to all marketers in the downstream sector.
The marketers also expressed dissatisfaction over the decision to make NNPC Limited sole off-taker of petrol from Dangote Refinery, stressing that the arrangement will create monopoly and profiteering.
He said: “The most important thing is that we are asking for availability. We are not against increase in fuel price as marketers but the most important thing is that let the fuel be available to us to buy.
“We think the arrangement between Dangote and NNPC that made NNPC the sole off-taker should be looked into. As major stakeholders and independent marketers, Dangote should be allowed to sell to us directly. The distribution should be opened up so that other stakeholders can buy the product like NNPC.
“This is because NNPC is also a competitor in the downstream sector and it is wrong to single out one competitor amongst others and sell petrol to him such that others will be dependent on one source. We think that this will bring monopoly, profiteering and stagnation in the petrol distribution process.
“It is pertinent that the Federal Government intervenes at this point. Let IPMAN be given the opportunity to also get their products directly because we can quickly distribute, we spread across the country and we are reliable”, he added.
On his part, the National President, IPMAN, Alhaji Garima Abubakar, stated: “We received the message early in the morning yesterday that an additional increase of N240 has been added to the previous price of N568 per litre.
“IPMAN do not have any objections to the increase as NNPCL claimed they were loosing money. We marketers have complied with the increment and also increased our prices at the pump,” he added.
Private depots shut
A visit to private depots in Lagos showed that no tank farm sold petroleum products yesterday. A marketer who spoke on condition of anonymity said that since NNPCL announced price increase, all depot owners in Lagos refused to sell products, claiming they were waiting to hear from NNPCL on pricing.
Labour demands immediate reversal
The Nigeria Labour Congress, NLC, yesterday rejected the new petrol pump price regime, rallying Nigerians against any further action of the government that can worsen the suffering and hardship across the country.
NLC in a statement at the end of its virtual National Executive Council, NEC, meeting yesterday, demanded “immediate reversal of the clandestine increase in the price of petrol.”
Among others, the communiqué signed by NLC President, Joe Ajaero, said: “The NEC rejects the hidden plan to increase the price of Petrol, PMS, and calls on all members of the NLC and the broader Nigerian public to remain vigilant and prepared to defend our rights and freedoms. The signs are ominous and the intentions are sinister as the State may be preparing to further increase the suffering of Nigerian workers and peoples. The Labour movement stands as the voice of the Nigerian people, and we will not relent in our efforts to uphold justice, fairness, and the rule of law.
“NEC-in-session therefore further demands the immediate release of all citizens from Prison who were protesting against hardship and hunger in Nigeria during the #EndBadGovernance protest.
“We also demand immediate reversal of the clandestine increase in the price of petrol. NEC–in-session demands a reversal of the hike in electricity tariff as we had originally demanded. We equally demand a halt to the indiscriminate arrests of citizens around the country for holding dissenting opinions.
“The Nigeria Labour Congress (NLC) remains committed to defending the rights and interests of Nigerian workers and the broader society. We will continue to stand firm against any attempts to undermine the Labour movement or infringe upon the rights of our leaders and members. We urge our Civil Society allies to continue increasing their support as we mobilise to nip the present incipient danger and undemocratic actions against our nation in the bud. A people united, can never be defeated! Workers united, can never be defeated.”
It’ll negatively impact manufacturers, worsen inflation – MAN
In his reaction, Director General of the Manufacturers Association of Nigeria, MAN, Segun Ajayi-Kadir, said the increase in pump price would negatively impact the manufacturing sector and worsen inflation.
His words: “In terms of what the impact might be and judging from what we have witnessed in the past, the cost of transportation may increase, and so would the prices of goods and services.
“These are pointers to the high possibility of a rise in inflation figures, impacting household budgets.
“One is naturally worried about the impact on the already lacklustre performance of the manufacturing sector. In particular, there is no doubt that it will add to production input and logistics costs.
“These will lead to higher prices and in the face of dwindling disposable income of the average Nigerian, a further deep in consumer demand will see manufacturers’ unplanned inventory rising and reduction in capacity utilization. “Manufacturing performance would be negatively impacted. Small businesses and households who use petrol fuel for daily activities would also take a hit.”
Similarly, National Secretary of the Small Scale Women Farmers Organisation in Nigeria, SWOFON , Chinasa Asonye, said: “The new fuel price will affect everything and there will be a price increase in everything. As a woman farmer, everything about our farming will increase because as of Monday, September 2, the feeds which we have already ordered have been increased and we do not know the reason for the increment until the news broke.
“These are feeds that we have paid for but because we did not take them from the company, they increased the price and told us that we are going to pay more before carrying our feeds. So, it will not be easy for the masses at all. Whatever will increase when it comes to fuel, will affect the livelihood of Nigerians.
“Is this how they want to reduce our hunger? Is this the reaction to the protest by the youths? Is this how this government wants to solve the problem of the masses? This will only aggravate hunger in the land. Agriculture will be affected badly and the cost of food will skyrocket. This simply means that masses’ voices are meaningless when it comes to governance in this country. Nobody is ready to listen to this groaning of the masses. This is cruel”, she lamented.
Also, President of Association of Professional Women Engineers of Nigeria, Lagos Chapter, Engr. Atinuke Owolabi stated: “We need to confirm the price from Dangote. I read that the Federal Government said they did not ask NNPCL to increase any fuel price. And I still do not know why NNPCL wants Dangote to supply them directly. Dangote should be distributed to everybody who wants to buy fuel. It is suicidal for NNPCL to be the sole distributor of Dangote fuel.
“We do not want monopoly again. Let Dangote distribute to all marketers. Let us all have access to the fuel because it belongs to us. It seems there are some cabals in NNPCL and we need to be very careful.”
On his part, Chairman of the Nigerian Port Consultative Council, NPCC, Mr. Bolaji Sunmola, warned that government with the latest action was calling for a protest, adding that Dangote Refinery should be encouraged to bring down the price of petrol.
Similarly, President of the National Council of Managing Directors of Licensed Customs Agents, NCMDLCA, Mr. Lucky Amiwero said that the development will further improve the economic situation, especially Nigerians working within and around the maritime industry.
Amiwero also said that it is either the government is confused or that government is not saying the truth about the issue of subsidy.
He said: “Many people in the port industry have been finding it difficult to come to work because of the issue of fuel scarcity and now this additional burden of increase in pump price of fuel.
This will further make Nigerians lose their jobs, adding that a country with the raw material for the production of petroleum products should not be going through this kind of hardship.
“Many workers have not been coming to work for now especially in port operations Many people have lost their jobs.”
Analysts list economic consequences
Reacting to the hike in petrol prices, Clifford Egbomeade, a public affairs and communications expert, stated: “The increase in fuel prices to N855 per litre, as announced by NNPCL, is a significant development with far-reaching implications for both the economy and the average citizen. Although this drastic increase is part of the broader context of subsidy removal, it also presents severe challenges for an economy heavily reliant on fuel for both transportation and power generation.”
Commenting on the economic impact, he added: “The most immediate effect of the fuel price hike is on inflation. According to the National Bureau of Statistics, the headline inflation rate rose to 34.19% in June 2024, up from 33.95% in May. With higher fuel prices, transportation costs have surged, leading to increased prices for goods and services across the board. This has further exacerbated existing inflationary pressures, potentially driving inflation rates even higher and making everyday essentials less affordable for Nigerians.
“The hike will also raise the cost of living. As fuel prices climb, so too will the costs of transportation, food, and other essential commodities, straining household budgets. With over 40% of Nigerians living below the poverty line, according to the World Bank, this increase will likely push more people into poverty as they struggle to afford basic necessities.
“The business sector is not immune to these effects. SMEs, which constitute a significant portion of Nigeria’s economy, will face higher operational costs due to increased fuel expenses. This could lead to reduced profitability, job losses, and, in some cases, business closures. Larger
corporations may pass on these increased costs to consumers, further fueling inflation. Public transportation costs are expected to rise sharply, affecting mobility as many Nigerians may find it difficult to afford daily commutes. The fuel price hike could also trigger social unrest, as seen in past protests sparked by economic grievances.”
The government should also introduce price control mechanisms on essential goods and services to prevent excessive price hikes and strengthen consumer protection agencies to monitor and enforce fair pricing practices.”
New price still below market rate – expert
In an interview with Vanguard, Professor Emeritus in Petroleum Economics & Policy Executive Director, Emmanuel Egbogah Foundation, Abuja, Wumi Iledare, said: “There are two inflation categories—demand pull and cost-push. Nigeria suffers from both types. Increasing wages and prices of raw materials do lead to higher inflation. So increasing the price at the pump will in the short run lead to rising price levels in the economy.
“Unfortunately, it is a dilemma to charge a price below the clearing market price because of the fear of inflation, and this anxiety is legitimate. But not doing the needful now is postponing the evil days.
“N897 per litre is still below the market clearing price of PMS. Just look at the price of AGO. The gap is still neither incomprehensible nor justifiable. The positive side at the moment is the current price setting by the dormant retail firm is helpful to Dangote optically within the context of the entitled Nigerians for freebies.
“Interestingly, however, pricing below the market clearing price will lead to shortages and black market structure. I don’t expect to price its wholesale price too far below N1,000, which is, perhaps, a little below the current landing cost, in my opinion.
“The consequences of pricing below the market clearing price is as negatively impactful as inflation in any economy.”
Meanwhile, reacting to reports in online platforms that he ordered NNPC to sell petrol above N1,000 per litre, the Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri described the reports as malicious.
The Minister in a statement by his media aide, Nnemaka Okafor, said NNPC operates as an independent company, adding he does not direct NNPC on issues of pricing.
“We categorically condemn these claims as baseless, malicious, and a deliberate attempt to incite public discontent. We challenge anyone in possession of any evidence — be it written documents, audio, or video recordings — that supports these fabrications to make it public. Such a claim is entirely devoid of truth and should be recognized as an intentional effort to mislead the public.
“It must be stressed that NNPCL operates as an independent entity under the Companies and Allied Matters Act (CAMA), with a fully empowered Board of Directors. The Ministry of Petroleum Resources does not, and will not, interfere in the internal decisions of NNPCL, including pricing matters.
“The public is hereby strongly advised to dismiss these malicious rumors. The Honourable Minister cannot, and does not, direct NNPCL or any other entity within the sector to manipulate prices.”
Depots, many stations shut in Lagos, environs
In Lagos, a visit to Satellite and other depots, yesterday, indicated that they were shut because of uncertainty over pricing.
Operators, who spoke anonymously to Vanguard, said the depots would re-open for business as soon as they are briefed on the new depot price and other details.
But many stations, especially independents were shut, due to lack of stock, thus leading to the emergence of long queues at the NNPC and major marketers’ outlets.
Many illegal operators also cash in on the confusion to hawk petrol in cans at the cost of between N1, 200 and N1,500 per litre in different parts of Lagos, especially Maryland, Ikorodu Road and Ikoyi.
Transporters that managed to buy the product passed the high cost to commuters, who were compelled to high fares.
Specifically, transport fares have risen by more than 100 per cent to N3,000 to commute from Victoria Island to Mile 2, a distance that used to cost about N1,500 before the latest fuel price hike.
Not palatable for Nigerians, but govt has no choice – CPPE
Reacting, the CEO of the Centre for the Promotion of Private Enterprise, CPPE, Dr Muda Yusuf, said: “The reality is that this is a very difficult situation for the government and NNPCL. And I hope that as citizens, we should show some understanding at this time.
“As we speak, even at the price of N650 to N700, the government was incurring a subsidy of about N500 per litre, and we had continued on that trajectory, at the end of the year, the subsidy bill be incurring will be close to N8 trillion to 10 trillion. The fact is that this is not sustainable.
“The subsidy bill increased because of the depreciation of the currency, and the relative gap between the domestic price of petrol and the price in the sub-region, especially our neighbouring countries which has widened considerably. Petrol cost per litre in our neighbouring countries is between N1,300 and N1,500 equivalent. So you can imagine the incentive for smuggling.
“However, it would be unfair to put the blame entirely on the current administration.
“Most of the underlying problems around fuel pricing are legacy problems. “The increase is not palatable for the citizens and the private sector. But this is an extremely difficult decision that the government needs to make.”
Netizens react
Netizens also took to social media yesterday, with many criticising both the NNPC and the Federal Government.
One commentator, Daniel, expressed his disappointment, saying, “Lol… seems this is just the beginning. They are even proposing 10% VAT and it may happen anytime. I didn’t (and still don’t) support Tinubu, but never in my wildest dream did I think he’d be worse than Buhari.”
Another user, who identifies as Chase, criticized those still supporting the government, remarking, “well, while the wailers are wailing, let the praise singers continue to sing their praises to Agbado… I hope the paid e-rats like terrorists Macido, sim card chucks etc will ask for a pay raise from their paymaster. Jungle don continue to the RED!!!”
Despite the overwhelming negativity, some netizens attempted to adopt a more optimistic view. A commenter named “One God” acknowledged the severity of the situation but remained hopeful, stating, “I know this government meant to run a sustainable system. The gravity of the problem is enormous. But with the grace of God, our government will win.”
In a more sarcastic tone, a user named Judeskyla Bardooo suggested an alternative to coping with the high fuel prices, saying, “Everybody should buy a bicycle. It is a recommended mode of transportation because of its health benefits. Asiwaju is committed to keeping everyone healthy.”
Finally, another user who goes by ‘My Opinion’ condemned the NNPC as part of Nigeria’s systemic issues, stating, “NNPC is a very corrupt organization. They are part of the people dragging Nigeria backwards.”
The recent price hike has fueled concerns about the increasing cost of living in Nigeria, with many worried about how this will impact everyday life, including transportation and the cost of goods and services.
Vanguard
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