Price Watch: Average petrol pump prices spike in April

The average pump price of premium motor spirit (Petrol) increased by 0.4 percent in April 2019. This is revealed in the latest PMS price watch data released by the National Bureau of Statistics (NBS).

According to the NBS data, the average pump price paid by consumers for petrol increased to N145.9 in April 2019, up from N145.3 in the previous month which was unchanged. However, Year-on-year, the average price of PMS decreased by 3.6% in April 2019.

Petrol Pump Price across States: At the States level, Petrol was sold at different pump prices in April 2019. Out of all the 36 states, the consumers in Bayelsa, Kogi, and Yobe paid the highest Pump prices for Petrol at an average of N148.64, N147.88 and N147.82 respectively.

On the other hand, three states with the lowest average of Petrol pump price for the period under review include Katsina (N143.50), Zamfara (N144.43) and Abuja (N144.67).

Petrol Prices highest in Nort-East: Across the six geopolitical zones, consumers in Northeast once again paid the highest average pump price of ₦146.58 in April from ₦145.96 recorded in March. The Southeast zone ranked second with the highest average pump price of ₦146.40.

The remaining zones are ranked in this order – South-South (₦146.30), North Central (₦146.20), North West (₦145.11) and South West (₦145.13).

Optics – The rise in Petrol pump price for April 2019 further drives home speculations concerning the purported imminent increase in Prices of Petrol. Just yesterday, Nairametrics reported that analysts are of the opinion that there is an impending hike in petrol price, and this is due to the fact the fuel subsidy has drained the Federal Government’s revenue.

Specifically, the Managing Director of Financial Derivatives Company Limited, Mr. Birsmarck Rewane,  disclosed that there is an impending hike in petrol price due to the fact the fuel subsidy has drained the Federal Government’s revenue.

“A gradual reduction in subsidy payments is anticipated. Only N305bn set aside for under-recovery in 2019 budget; expect an increase in the pump price of fuel.”

Also recall that since the International Monetary Fund (IMF) called for Nigeria’s removal of fuel subsidy, there has been a renewed national debate on the fuel hike.

Upshots – Last month, the Nigerian Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, disclosed that the landing cost of PMS is N35 higher than the pump price of N145 per litre. This suggests that a new pump price for petrol may be in the pipeline. Meanwhile, the slight increase in pump prices of petrol across zones in April indicates that Nigerians in zones with the highest prices of pump prices would bear the brunt. Most importantly, the North East, the rise in Petrol pump price will unleash more hardship on Nigerians in that region.

On the other hand, if a new pump price is eventually announced, this will have a damaging effect on household budgets across the country and will inevitably mean there will be less money available for non-essential spending. Also, firms who use petrol as part of production processes will grossly be affected.