The removal of fuel subsidies was announced by President Bola Tinubu three months ago, and Nigerians are still adjusting to the over 400% increase while waiting for the government’s promised palliatives.
Nevertheless, despite President Tinubu’s assurance that the price of PMS won’t rise further, the rise in crude oil prices on the global market may result in a significant increase in the cost of gasoline at the pump.
The cost of crude oil on the world market has increased to $94 per barrel, the highest level in the previous 10 months. Market watchers predict that the price will surpass $100 as wintertime demand rises.
In the past, this increase would have been welcomed since it would have meant more money for the Nigerian government, but now it means that Nigerians may end up paying more for petrol.
President Tinubu had said last month that the price will be kept stable by “addressing the inefficiencies within the midstream and downstream petroleum subsectors to maintain prices where they are without having to resort to a reversal of the administration’s policy in the petroleum industry.”
A few members of the House of Representatives were informed on Friday by Mele Kyari, Group Chief Executive Officer of NNPC Limited, that NNPC Retail is striving to secure sizeable market shares in the downstream industry in order to exert control over the downstream market.
You may remember that NNPC Retail bought the retail locations of Oando Limited in December.
According to Kyari, the agreement gives NNPC Retail 30% of the market, giving it the power to control pricing thanks to its market dominance. He said that since NNPC Retail won’t raise prices, other petroleum marketers would be obliged to maintain pricing.
There was a brief line after one business raised their pricing by N7 a few weeks ago in Lagos. Simply said, everyone sped for our gas stations, where a line quickly formed. The PIA promises this level of protection.
“That Nigerians would have options and won’t be taken advantage of. We’ll maintain market equilibrium. Nigerians won’t be taken advantage of thanks to the market stability we’ll bring about, he promised.
Despite the President’s and the oil chief’s assurances, Nigerians are nevertheless apprehensive about the increase, especially given the liberalization of the industry.
Dr. Babatunde Adeniran, an economist, claims that given the dynamics of supply and demand on the global market, an increase may be unavoidable.
“Yes. In response to a query about the likelihood of a price increase, Adeniran states that it is unavoidable since they (marketers) modify prices in accordance with market reality, or the dynamics of supply and demand.
substitute energy sources
In an August nationwide broadcast, President Tinubu pledged to spend N100 billion in compressed natural gas (CNG) buses to lessen the effects of the elimination of subsidies.
President Buhari said, “The Nigerian Government has set aside N100 billion to buy 3,000 twenty-seater buses powered by compressed natural gas for deployment in all states in the upcoming nine months.”
Adeniran pleaded with the government to help the common people by subsidizing the CNG kits.
“Finding an alternate source of energy is one way to lessen the impact. The CNG is one such option. Due to its relative affordability and cleanliness, it continues to be the best supplier.
“However, in order to help, the government may subsidize the CNG kit. More people will support this if the government succeeds in that.
Nigeria has the ability to satisfy demand; at the moment, we flare a lot of gas. We can direct the gas into CNG, which would be more productive than flaring it, he added.