Reactions have continued to trail the persistent high cost of Premium Motor Spirit, PMS, commonly known as petrol in Nigeria despite having two functional refineries in the country: Dangote and Port Harcourt refineries. Many Nigerians say the price of fuel was expected to reduce with the coming on board of the two refineries in the country.
Thank you for reading this post, don't forget to subscribe!REFMEDIAGIST reports that the first petrol price hike occurred shortly after President Bola Tinubu announced subsidy removal in May 2023, causing a major price disruption in the petroleum industry. After the announcement, the Nigerian National Petroleum Company Limited, NNPCL, raised the price from N195 to between N448 and N557 per litre- a 185.64% increase. The federal government, however, defended the hike, explaining that the subsidy, which cost over N400 billion monthly, was unsustainable.
Barely a month later, precisely June 2023, the price of petrol rose again from N557 to N617 per litre, an increase of 10.77%. NNPCL attributed the hike to market dynamics, with the President of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Chinedu Okoronkwo, confirming that global economic factors beyond local control were responsible for the increase.
Again in September 2024, the price jumped by 45.38% to between N855 and N897 per litre. In a statement, NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, disclosed that the company was under severe financial pressure, which posed a threat to the sustainability of fuel supply, adding that the increase resulted from financial difficulties, including high debts to petrol suppliers.
The most recent increase followed NNPCL’s decision to step back from its role as a middleman between marketers and the Dangote Refinery. This opened the market to direct dealings between the refinery and marketers. Consequently, NNPCL and other fuel stations adjusted their pump prices to align with refinery costs, leading to a 15% increase to N1,030 per litre.
REFMEDIAGIST reports that Dangote Oil Refinery commenced petrol processing following delays caused by recent crude shortages. A vice president at Dangote Industries Limited, Devakumar Edwin, said the Nigerian National Petroleum Company Limited, NNPCL, the country’s sole importer of petrol, would exclusively purchase the refinery’s petrol. The news came a day after the NNPCL said it was grappling with severe financial challenges as it battles mounting debt to petrol suppliers, raising concerns over the sustainability of Nigeria’s fuel supply.
REFMEDIAGIST gathered that when the Group Chairman of Dangote Industries Limited, Aliko Dangote, announced the official rollout of Premium Motor Spirit, PMS, commonly known as petrol, on Tuesday, 3 September 2024, Nigerians were filled with hope and optimism for a reduction in fuel price. However, the hope was dashed as petrol prices have increased twice since the commencement of operations at the Dangote Refinery.
This confirmed the position of the Chief Corporate Communications Officer for the Nigerian National Petroleum Company Limited, NNPCL, Olufemi Soneye, when he stated that the refinery’s operations alone do not guarantee lower fuel prices. According to Soneye, global market forces determine the pricing of petroleum products from any refinery, including the Dangote Refinery.
Shortly after Dangote refinery began production, the NNPCL also later announced that the Port Harcourt refinery had begun production after a long period of rehabilitation. In a wide celebratory mode, NNPCL, announced the resumption of production of petroleum products at the old Port Harcourt Refinery, which has an installed 60,000 barrels per day (bpd) nameplate capacity.
Speaking to REFMEDIAGIST, many Nigerians expressed their disappointments. A respondent, Hassan Alowonle said for many years, Nigerians have slightly enjoyed democracy and good governance until when the current President, Bola Ahmed Tinubu removed the fuel subsidy.
“The price of the fuel has always been friendly even during the tenure of former President of Nigeria, Goodluck Ebele Jonathan. During his time, there was a mass protest over the hike in fuel price but many Nigerians can’t compare the administration with the current government of President Bola Ahmed Tinubu.
“When no refinery was working in the country, the government ensured it subsidized the price of the fuel, giving Nigerians the opportunity to buy PMS at a cheaper rate. Even when the immediate former President of the country, Muhammadu Buhari handed the baton to Bola Tinubu, the price of the fuel was N210.
“However, when Nigeria now has functional refineries both in Lagos and Port Harcourt, the price of fuel is sold at the rate of N1,040. It is obvious that the current administration is generating revenue at all costs. The price of the fuel will keep increasing even as the refineries are working. The current government is not considerate about the welfare of the citizens,” he said.
Another respondent, Mrs. Adebimpe Ojo, said the current fuel price was taking a toll on her business. “I am a food vendor. Since the fuel price increased, the cost of cooking gas has also increased. I am finding it difficult to cope. I am appealing to the government to find a solution to this problem,” she said.
A commercial driver, Mr. Gbenga Oyedepo, said the fuel price increase had affected his income. “I am a commercial driver. Since the fuel price increased, my income has reduced. I am finding it difficult to feed my family. The government should do something about the fuel price,” he said.
Meanwhile, the Nigerian National Petroleum Company Limited, NNPCL, has attributed the recent increase in the price of petrol to the cost of refined petroleum products in the international market.
In a statement, the Chief Corporate Communications Officer of the NNPCL, Olufemi Soneye, said the company was not responsible for the increase in the price of petrol. According to him, the price of petrol is determined by the cost of refined petroleum products in the international market.
“The NNPCL is not responsible for the increase in the price of petrol. The price of petrol is determined by the cost of refined petroleum products in the international market. The NNPCL is only a player in the market,” he said.
Soneye also said the NNPCL was working hard to ensure that the country has a stable supply of petrol. According to him, the company has put in place measures to ensure that the country does not experience fuel scarcity again.
“The NNPCL is working hard to ensure that the country has a stable supply of petrol. We have put in place measures to ensure that the country does not experience fuel scarcity again. We are committed to ensuring that the country has a stable supply of petrol,” he said.
However, many Nigerians have expressed skepticism about the NNPCL’s claim that it is not responsible for the increase in the price of petrol. They argue that the company has a monopoly over the supply of petrol in the country and therefore has the power to determine the price of the product.
“The NNPCL’s claim that it is not responsible for the increase in the price of petrol is not convincing. The company has a monopoly over the supply of petrol in the country and therefore has the power to determine the price of the product,” said a respondent, Mr. Wale Adeyemi.
Adeyemi also said the NNPCL’s decision to step back from its role as a middleman between marketers and the Dangote Refinery was a deliberate attempt to increase the price of petrol.
“The NNPCL’s decision to step back from its role as a middleman between marketers and the Dangote Refinery was a deliberate attempt to increase the price of petrol. The company wants to make more profit at the expense of Nigerians,” he said.
The Nigerian government has been criticized for its handling of the fuel subsidy removal and the subsequent increase in the price of petrol. Many Nigerians have accused the government of being insensitive to the plight of the citizens.
“The government’s decision to remove the fuel subsidy and increase the price of petrol is a clear indication of its insensitivity to the plight of Nigerians. The government is more interested in generating revenue than in the welfare of the citizens,” said a respondent, Mr. Kayode Ajayi.
Ajayi also said the government’s claim that the removal of the fuel subsidy would lead to an increase in the supply of petrol was not true.
“The government’s claim that the removal of the fuel subsidy would lead to an increase in the supply of petrol is not true. The supply of petrol has not increased since the subsidy was removed. Instead, the price of petrol has increased,” he said.
The Nigerian government has defended its decision to remove the fuel subsidy, saying it was necessary to save the country from financial ruin. The government has also said that the removal of the subsidy would lead to an increase in the supply of petrol and a reduction in the price of the product.
However, many Nigerians have disagreed with the government’s position, saying that the removal of the subsidy has led to an increase in the price of petrol and a decrease in the standard of living of the citizens.
“The government’s decision to remove the fuel subsidy has led to an increase in the price of petrol and a decrease in the standard of living of Nigerians. The government should reconsider its decision and find alternative ways to address the country’s financial challenges,” said a respondent, Mrs. Funke Akinwunmi.