The price of Premium Motor Spirit (PMS), commonly known as petrol, saw a notable increase in August, rising from N770.54 in July to N830.46, according to data from the National Bureau of Statistics (NBS).
The data revealed that a liter of petrol rose by 7.78% on a month to month basis following the admission of the Nigerian National Petroleum Corporation (NNPC) Limited of owing about $6 million debt in subsidy.
On a year-on-year basis, petrol price rose by 32.51% from N626.70 within the same period last year to N830.46 this year.
This significant increase is coming on the heels of the recent revelation by NNPC’s admission that its ability to supply the nation’s fuel was under threat due to its unpaid financial obligations to oil traders.
In a statement by its spokesperson, Olufemi Soneye, NNPC said the following:
“NNPC Ltd. has acknowledged recent reports in national newspapers regarding the company’s significant debt to petrol suppliers. This financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply.”
Notably, this admission by the national oil company led to a widespread of fuel scarcity in places in Lagos, Ogun State, Abuja and other places in the same month, with the price of fuel hitting over N1,000 in some areas.
In addition, Nairametrics reported that NNPC filling stations adjusted the price of its petrol from the official N612 to N850 to N890, depending on the location.
Data from NBS shows that the month of August had the highest increase in petrol price in decades, with some States like Gombe and Bauchi selling as high as N935.71 and N925.00.
Further Breakdown of the Data
A breakdown of the data shows that the average retail price paid by consumers for Premium Motor Spirit (petrol) in August 2024 stood at N830.46, reflecting a 32.51% increase compared to the N626.70 recorded in August 2023. When compared to the previous month, July 2024, where the price was N770.54, petrol prices saw a 7.78% rise.
- On a state-by-state analysis, Benue State recorded the highest average retail price for petrol at N941.24.
- Following closely were Bauchi and Gombe States, with average prices of N935.71 and N925.00, respectively.
- In contrast, Delta, Cross River, and Edo States had the lowest average retail prices for petrol, with Delta at N667.50, Cross River at N672.00, and Edo at N676.25.
- Further analysis by zone shows that the North-East Zone had the highest average retail price at N908.21, while the South-South Zone recorded the lowest at N677.11.
Why this matters
The rise in petrol prices has far-reaching consequences for both consumers and businesses across Nigeria. As fuel costs surge, transportation expenses are expected to climb, which in turn will likely push up the prices of food items and other essentials, contributing to a projected higher inflation in September.
Given that road transport is the backbone of the Nigerian economy, a continued escalation in the price of petrol will put additional pressure on households and businesses alike, exacerbating an already challenging economic climate.
Additionally, the recent offtake of petrol from the Dangote Refinery by NNPC has sparked hope for some relief, potentially not in price but in addressing fuel scarcity.
However, industry experts remain divided on whether the Dangote Refinery will lead to a reduction in petrol prices in the short or long term, meaning consumers may have to brace for sustained high costs for the foreseeable future.
