As the ripple effects of Russia-Ukraine war cut through economies, exposing many to inflation as the cost of living rockets, Nigeria, Africa’s largest economy that has helplessly watched the economic spikes take a toll on its people, is about to see its situation exacerbated.
On Monday, the Independent Petroleum Marketers Association of Nigeria (IPMAN) asked marketers across the country to begin dispensing petrol at N180 per liter and above, as it’s no longer possible to sell at the government’s approved price of N165 per liter.
“The chairman and executives, in conjunction with some senior members of our unit, organised a press conference today, 20th June 2022, at IPMAN HOUSE Ejigbo Lagos, where we explained our predicament with the current price of PMS at the private depot.
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“We explained that with the current price, there is no way we can sell less than N180 per litre. On this note, members are hereby advised to sell at a sustainable price within their environment.
“Just make sure that the price is on your pump. Kindly contact the secretariat should you have any authority challenging your operations,” IPMAN spokesman Akeem Balogun said in a statement to Peoples Gazette.
Recently, there has been an uptick in queues at petrol stations, signaling imminent scarcity of petroleum products once again.
Earlier, petrol distributors and the Nigerian Association of Road Transport Owners (NARTO), had cried out to the federal government, asking for permission to increase freight rate as the price of diesel, which has risen as much as N800 per liter, is making their business unsustainable.
In response to their outcry, President Buhari, last week, approved the upward review in freight rate for transporters. This was disclosed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
“The review was necessitated by the upswing in the global price of petroleum products especially automotive gas oil (diesel) and its implication on the cost of transporting premium motor spirit (PMS) nationwide,” NMDPRA said, adding that the transporters’ freight rate has been reviewed to reflect current market realities.
Nigeria is facing a serious challenge in its downstream sector that has been compounded by rising oil prices. Fuel subsidy, which is gulping nearly 30% of Nigeria’s 2022 budget, has put the government in a difficult situation. The government has repeatedly failed to remove the subsidy due to opposition from the Nigerian Labour Congress and civil rights groups, who fear that its removal would deteriorate the already bad economic situation of the country.
However, without a choice, the government is succumbing to the harsh realities of the oil market. With crude oil selling above $100, Nigeria needs to double its $62 budget’s oil benchmark to sustain the subsidy payment and keep pump price at the N165 per liter cap, which it has been borrowing to maintain.
The Finance Minister said Nigeria will need further N4 trillion if the subsidy is to be maintained in the next six months. But selling fuel at N180 per liter means Nigerians will experience a new height of economic hardship. For a country where businesses depend mainly on power generators for electricity, the already high cost of goods services is expected to see further spike. This will push inflation, which is currently at above 17%, further up.
We don’t need more analysis and diagnosis of Nigeria’s problems, I think we are pretty much aware, the only question remaining is, do we have a Nigerian or group of Nigerians capable of addressing them? We live in alternate reality here, that is why we are able to keep petrol price at N165 up to this point, now the cost of diesel to transport the same petrol is forcing an increase; it tells you how terrible our way of understanding reality is.
Please we only want to hear from problem solvers, enough of the lamentations, else we will sink deeper and deeper.
This is not how to run a country, we all need to very embarrassed. Enough said.