Nigerians now pay an average of N191/Litre for fuel compared to the official pump price of N145/Litre. This is based on the latest PMS Price Watch published by the National Bureau of Statistics.
The data highlights in no small measure, the effect of scarcity of petroleum products, particularly PMS, experienced across the country since December 2017. The average price of N190.9 is the highest we have seen since the Bureau started tracking this data in January 2016.
Galloping Fuel Price
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The increase in the price of fuel over the last few weeks is largely attributed to higher oil prices recorded globally and higher exchange rate required by marketers to import petroleum products.
These challenges, have resulted in the NNPC being the sole supplier of fuel into the country as independent marketers avoid the risk of under recovery. Independent marketers who often contributed to fuel imports stopped importing as they will have to increase the price of fuel to cover their cost of imports. The President has made it clear that he is not interested in a fuel price hike.
Unfortunately, the NNPC is taking the hit on behalf of Nigerians. The state owned oil firm’s marketing arm reported a year to date loss of N91.4 billion per the November NNPC Financial report. As things stand, the losses are only expected to widen except oil prices fall or the government decides to hike the price of PMS (Fuel).
For now, Nigerians across the length and breadth of the country will have to grapple with frequent fuel scarcity, long queues and price volatilities. Recent NBS data also shows every state in the country is experiencing a hike in fuel price, since the recent scarcity started in December 2017.
States with high PMS rates
Of all the 36 states in the country and including the FCT, the following states have recorded the highest increase in the price of fuel, between January 2016 and January 2017.
- Benue State topped the list with a 53.5% rise in the price of petroleum products. Fuel is currently going for N223.3 per litre in the state.
- Interestingly, neighboring Kogi State is selling for N152.8 and has recorded a paltry 5% rise.
- Benue State also recorded a month on month spike as fuel price rose 29%
- Abia State recorded the most expensive rise in fuel price among the Eastern States. Fuel price has risen 53% year on year and currently trades at N227
- Osun State indigenes ended up paying the most average cost for fuel at N228.8 in January 2018.
- Key commercial states in the country such as Lagos, Kano, Anambra, Ogun, Abuja and Rivers States all sole fuel for N161.4, N182, N211.6, N203, N160 and N197.5 respectively.
What this means
- As economist keenly hope that the rising trend of disinflation in Nigeria continues, they will have one eye at the rise in fuel prices nationwide.
- It will not be unwise to expect cost of goods and services, particularly food to experience price increases in the short to medium term.
- This also gives ammunition to analysts who opine that the current inflation rate is not reflective of the real cost of doing business in the country.
- Ordinary Nigerians who expect a fall in interest rates may have to wait a little longer as rising fuel prices across the country indicates a structural challenge which banks will not hesitate to cite as a reason for the expensive nature of their loans.
