President Bola Tinubu’s promise to lower petrol prices during his campaign has resulted in a 488 percent increase, from N175 in May 2023 to N1,030 in October 2024, causing additional hardship for Nigerians, report Dare Olawin.
When President Bola Tinubu took office on May 29, 2023, the first thing he did was remove the petrol subsidy. Tinubu, like a man in a rush, said right after taking the oath of office, “The fuel subsidy is gone.”
Following the announcement, the country’s economic situation deteriorated significantly. Filling stations, including those run by the Nigerian National Petroleum Company Limited, have boosted petrol pump prices to more than N500 per litre. Some Nigerians, who had thought that the new administration would improve the situation, became concerned; nevertheless, the President persuaded them that there would be gain after suffering.
Surprisingly, Tinubu raised the fuel price without referring to the pledge he made in Abeokuta during his campaign to lower the price of gasoline.
While campaigning, Tinubu and the other main candidates promised to eliminate gasoline subsidies if elected. However, while he was in Abeokuta, Ogun State, the then-APC candidate appeared to backtrack on his vow to lower petrol costs. The former Lagos State Governor accused the Muhammadu Buhari administration of creating artificial gasoline scarcity to force him to lose the election.
Tinubu told APC fans in Yoruba, “Won ni epo ma won, oma di N200, oma di N500. E lo fokanbale, a maa gbe wale” means “They stated there would be a gasoline price increase; that it would rise to N200, N500. Put your mind at ease; we will bring it down.
The crowd erupted in jubilation, viewing the Lagos politician as a messiah. However, the opposite has been true since he has been in charge for the past 16 months.
For the average Nigerian, petrol means more than it does in other countries. The country’s economy is virtually entirely based on petroleum. Both the rich and the poor require petrol for one or more activities, such as driving a car or powering motors for commercial purposes.
Furthermore, in a country where over 85 million people lack access to electricity, petrol has traditionally been the people’s best hope for avoiding darkness, rich and poor alike. Nigeria is also one of the world’s greatest power generation markets.
With the increased cost of gasoline, access to electricity has decreased, particularly in rural areas.
Similarly, those who have no incentive to buy gasoline experience the impact of the price increase whenever they try to use public transportation, as commercial drivers have raised the cost of transportation. The high cost of transportation has caused market prices to climb on a regular basis.
The masses’ problems were exacerbated around two weeks after Tinubu’s inauguration, when he floated the naira.
In June, the Central Bank of Nigeria authorized Deposit Money Banks to eliminate the naira’s rate cap at the Investors and Exporters Window of the foreign exchange market, allowing the national currency to float freely against the dollar and other global currencies.
Following this revelation, the naira fell from roughly N400/dollar to more than N700/dollar during I&E trade on June 14, 2023. Today, the naira has lost more value, selling at much than N1,600 as of Wednesday.
This indicates that the price of gasoline will continue to climb because it is priced in dollars.
When the President depreciated the exchange rate, the price of gasoline climbed again. However, the NNPC rapidly implemented subsidized payments through the backdoor. While the landing cost of petrol was roughly N1,200, the NNPC sold it at half the price based on the Federal Government’s guarantee to refund the deficit, often known as “under-recovery.”
For nearly a year, the NNPC sold the fuel at roughly N600 per litre. The oil company continued to refute charges that it provided subsidies.
Recently, however, the energy company admitted to selling below cost.
The company’s Chief Financial Officer, Umar Ajiya, remarked, “In the last eight to nine years, NNPC has not paid anybody a cent as a subsidy; no one has been paid a kobo by NNPC in the name of subsidy. No marketer has gotten a subsidy from us.
“What has happened is that we have been importing PMS at a set cost price, and the government has told us to sell it at half the price. So the difference between the landing price and the half-price is a shortfall.
“And the agreement is between the federation and the NNPC to reconcile. They sometimes give us money, therefore no money is exchanged with any marketer in the name of subsidy,” he claimed.
Following accusations that the NNPC was in debt to a number of its PMS importers, the firm quickly refuted the allegations, telling The PUNCH that there was nothing like that.
“NNPC Ltd does not owe $6.8 billion to any international trader(s).” Transactions in the oil trading business are conducted on credit, thus it is usual to have outstanding balances at times,” said Olufemi Soneye, the company’s spokeswoman.
A few weeks later, the national oil corporation acknowledged that it owed its suppliers. It claimed this when there appeared to be no way out of the long fuel lines at filling stations.
“NNPC Ltd has recognized recent revelations in national newspapers about the company’s substantial debt to petroleum suppliers. This financial burden has put significant strain on the company and threatens the long-term viability of gasoline supply,” Soneye stated in a September statement.
Immediately following Soneye’s comment, NNPC hiked the PMS pump price from N600 to N855/litre or higher, depending on region. This substantial increase coincided with the launch of the Dangote refinery’s PMS, raising fears about what the future contained for Nigerians, with expectations that the private refinery would drive down the price of the commodity.
As the NNPC began to remove PMS from the refinery in September, it announced another price rise. Soneye hinted that a litre of the product was purchased for N898. It further stated that it would sell petrol between N950 to N1,119.
Soneye explained that the price might be as high as N1,019/litre in Borno State and N999.22 in Abuja, Sokoto, Kano, and other places.
It would cost N960 a litre in Oyo, Rivers, and other southern districts, and N950 in Lagos and its surrounding territories. Since the announcement, the NNPC has kept the price of petrol below N900.
However, without any notice, the state-owned firm raised the price to N1,030 on Wednesday, confusing the populace.
According to sources, the NNPC intends to withdraw as the exclusive off-taker of Dangote PMS, allowing marketers to buy straight from the refinery.
Currently, the two parties are not speaking to Nigerians. The technical committee set up to organise the sale of naira crude to local refineries is likewise not communicating, despite the fact that lengthy lineups have resumed at filling stations nationwide.
