The average retail price paid by Nigerians for Premium Motor Spirit (PMS), also known as petrol, increased by 29.81 percent in the 12 months to November 2022, making a mockery of the government-regulated price of N165 per litre, data from the National Bureau of Statistics (NBS) has shown.
The average retail price rose from N168 per litre to N202 in November. On a month-on-month basis, it increased by 3.68 percent from N195 in October.
Despite a government-regulated price that compels fuel stations to sell petrol at N165 and millions paid as bridging claims to oil marketing companies to enable a uniform pricing for petrol, data shows that prices continue to rise and uniformity is not maintained.
Last month, Chinedu Okoronkwo, president of the Independent Petroleum Marketers Association of Nigeria, blamed the current petrol scarcity on dollar shortages and distribution challenges.
According to Okoronkwo, petroleum marketers are expected to get the product from tank farm owners at N148.19 per litre but they now receive the product at N185-N210. Analysis shows they are pricing in the inefficiencies and challenges of getting the product from Apapa.
In November, Olufemi Adewole, executive secretary of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), at an oil sector event in Lagos, said marketers were unable to secure foreign exchange at the official rate to enhance the supply and distribution of petrol.
According to DAPPMAN, shortage of foreign exchange, coupled with several unauthorised levies, and bad roads are among the factors making fuel importation and distribution burdensome for Nigerians.
“Petrol remains an imported product while it is subsidised. The NNPC has been unable to provide a competitive benchmark that gives marketers enough margins to make a profit,” said Chinedu Onyegbula, an energy sector expert and director at Bullox Resources Limited.
“Nigeria does not refine crude and depends on imports to meet demand; NNPC is the dominant monopoly playing in that field.”
According to Onyegbula, crude oil prices have continued to rise in the recent past and the fluctuations in the dollar, which is a major factor in the crude oil market, have not made it easier. Hence, the underlying effect is that the price is passed on to the customer above the benchmark in order to be profitable, he said.
For Etulan Adu, an oil and gas production engineer, the supply and demand for crude oil, refinery production and capacity, naira-to-dollar exchange rate, distribution/ transportation costs, importation costs and Nigeria’s fiscal policies are factors that are affecting the price of petrol.
“There is also a gameplay between major independent marketers trying to increase the price to curb the imports, distribution and depot price and the pump price,” Adu said. “They are using the subsidy removal to mop up prices since the government will not bear additional costs for them.”
Business owners who spoke with BusinessDay said they transferred the high cost of petrol to their services. Some petrol users told our correspondents that the queues have reduced, but the cost still stays high.
Adeola Kehinde, who grinds pepper and tomato at Ikorodu garage, increased the cost of her service from N100 to N200, as the price of petrol increased to N220.
“Due to the increase in petrol price, I increased the cost of my service from N100 to N150 or N200, depending on the quantity of pepper and tomato my customers bring. Most of my customers complain and some even walk away, hoping to see a cheaper price,” she said.
Dada Lawal, a bus driver at Ogolonto Garage, said he bought petrol last week for N210 per litre from a filling station at Agric bus stop.
“The petrol scarcity has made business slow for bus drivers in our area. To cope, I had to transfer the cost to my customers. From Ogolonto to Ikorodu Garage used to be N100; now passengers are now charged N150 or N200,” he said.
Uchechukwu Emeka, a resident of Satellite Town Lagos, told BusinessDay that he spent N7,000 to fill his 25-litre jerry can on Sunday. “I was thinking as the fuel queues reduced, the price will. Unfortunately, I still get it for N240, sometimes N250 per litre.
According to NBS data, Kwara State had the highest average retail price for petrol at N217 in November, followed by Enugu (N216) and Gombe (N215).
The lowest average price was recorded in Ekiti (N189), followed by Akwa Ibom (N189.3) and Delta (N190).
Analysis by zone showed that the North-Central zone had the highest average retail price of N207, while the South-South zone had the lowest price of N195.
