The recent surge in petrol prices has sparked concerns among Nigerians, with many feeling the pinch of increased transportation costs and general rise in the cost of living. As a Nigerian who buys petrol and pays for transportation, columnist Iliyasu Haruna Bala believes there is a need to discuss the speed at which petrol prices respond to global market fluctuations. Bala notes that whenever there is a major crisis in the global oil market, petrol prices in Nigeria quickly rise, but the reduction in prices when the situation eases does not always happen at the same speed.
Bala understands that Nigeria operates a deregulated petroleum market, where prices cannot be completely divorced from international market developments, exchange rates, supply and demand, and logistics. However, he questions what happens when the situation begins to ease, and whether there is room for temporary intervention to cushion Nigerians during extraordinary periods. Bala suggests that the government may need to consider extraordinary measures, such as a temporary subsidy or other relief mechanisms, to mitigate the impact of global shocks on ordinary Nigerians.
The National Bureau of Statistics recorded an average national retail price of ₦750.17 in June 2024, while Lagos recorded an average of ₦626.94. However, recent reports indicate that Dangote Refinery’s petrol gantry price has risen to ₦1,350 per litre, leading to adjustments in pump prices at several filling stations. In Abuja, motorists are already feeling the impact of the latest increases, with petrol prices ranging from ₦1,350 to ₦1,450 per litre, depending on location and filling station.
The impact of rising petrol prices goes beyond the filling station, affecting transportation, food, services, and almost every aspect of daily life. A trader pays more to transport goods, a farmer pays more to move produce, and a commercial driver spends more on fuel. A family also pays more to move from one place to another, highlighting the need for the government to explore ways of cushioning the impact of global shocks on ordinary Nigerians.
Bala is not arguing for a permanent return to subsidy, but rather for a temporary relief mechanism to mitigate the effects of global uncertainty. He believes that the welfare and purchasing power of Nigerians should remain at the centre of every conversation about energy policy. The columnist notes that at ₦1,350, ₦1,400, or ₦1,450 per litre, petrol is no longer just a petroleum-sector issue, but a household issue that requires urgent attention.
The current price levels have become the new reality, with many Nigerians struggling to cope with the increased cost of living. Before the current price levels became the norm, petrol sold around the ₦600 mark in some parts of the country. Bala argues that the government should continue to explore ways of ensuring that the burden of global shocks does not fall disproportionately on ordinary Nigerians, who are already dealing with high transportation costs, food prices, and general increase in the cost of living.
Bala concludes that the conversation about energy policy should focus on finding temporary solutions to cushion Nigerians during extraordinary periods. He believes that experts in the sector can recommend other mechanisms to mitigate the impact of global shocks, and that the government should prioritize the welfare and purchasing power of Nigerians in its decision-making process.
Key points
- The petrol price in Nigeria has risen to ₦1,350 per litre
- The impact of rising petrol prices affects transportation, food, services
- A temporary relief mechanism is proposed to cushion Nigerians during extraordinary periods
