What caused the increase?
According to NNPC spokesman Olufemi Soneye on September 1, 2024, the state oil company claimed it was burdened by the high cost of supplying petrol to Nigerians and a $6.8bn debt to international suppliers.
The NNPC also confirmed that the financial strain was making petrol supply to depots difficult, resulting in scarcity across Nigeria and posing a threat to the sustainability of fuel supply.
The new price adjustment is expected to reflect the rising costs of supply. While this isn’t exactly a surprise to independent fuel marketers and many Nigerians, some had held out hope that petrol production from the Port-Harcourt and Dangote refineries would make fuel supply more affordable.
How does Dangote come in?
On Tuesday, Aliko Dangote, chairman of the Dangote Group, released official petrol samples from his refinery. He declared that the product could enter the Nigerian market in 48 hours, depending on how soon he reached an agreement with the Federal Government. He also assured that the local sale of the fuel would help stabilise the naira and make scarcity a thing of the past.
However, it is unclear whether Dangote’s fuel will be a cheaper alternative. Dangote says the price will be determined through an agreement between his company and the federal government.
What does this increase mean for Nigerians?
Several experts have predicted that the upward review in the petrol pump price would further plunge Nigerians into poverty and worsen the country’s inflation levels.
The Director-General of the Nigeria Employers Consultative Association (NECA), Mr Adewale-Smatt Oyerinde, also expressed concerns about the new development. According to him, “This new pump price could be seen as making Nigerians pay for the crass inefficiency in the NNPCL.”
He remarked that he’d expected the planned commencement of operations from the refineries to progressively reduce the petrol pump price, but this does not seem to be the case.
Nigeria currently owns four refineries, and while billions of dollars have been spent on turnaround maintenance within the past year, none of them have been able to meet production deadlines.
Currently, Nigeria’s fuel supply is almost entirely dependent on fuel imports, and it looks like the pump price hike is here to stay. And unless petrol depots receive more cargo in the coming weeks, the fuel queues may be here indefinitely, too.
