Petrol Pump Price Increase: NNPCL Hikes Rates to N617

…motorist rush to buy petrol in Lagos, others

The Federal Government-owned NNPC Limited has raised its petrol pump price to N617 per litre from N537 in Abuja. This decision has sparked a rush among motorists to procure the product, particularly in Lagos and other cities. Despite the deregulation of the downstream sector of the Nigerian oil and gas industry, the national oil company has not provided any explanation for this latest price increase. However, it appears that operators can adjust prices based on their cost elements under the present deregulation.

The Reason Behind the Price Increase

While NNPC Limited has remained tight-lipped about the reason behind the petrol price hike, a closer look reveals several factors that might have contributed to it. One significant aspect is the dwindling value of the Naira, which has put immense pressure on fuel importers, including NNPC Limited, as well as major and independent marketers. As the Naira’s value decreases against foreign currencies, the cost of importing fuel rises, directly impacting the pump prices.

Impact on Motorists and Consumers

The recent price hike has sent ripples across the country, leading many motorists and consumers to rush to fuel stations to fill their tanks before prices potentially increase further. Reports suggest that some filling stations in Lagos and surrounding areas have already adjusted their pumps to over N600 per litre, reflecting the nationwide impact of this price surge.

Read Also: Unintended Consequences of Oil Subsidy Removal: A Struggle for Nigerian Households

Insights from the Independent Marketers Association of Nigeria

Commenting on the development, Mike Osatuyi, the national operations controller of the Independent Marketers Association of Nigeria (IPMAN), shed light on the situation. He emphasized that the price increase was not solely about NNPC Limited but a result of market fundamentals. Each marketer stands alone with different cost elements, and the current low value of the Naira is significantly impacting the market. With the exchange rate surpassing N800 to a dollar, the market is bound to react in this manner.

Osatuyi further explained that the cost of importing the product plays a vital role in determining the pump price. While some importers have managed to bring in the fuel, it cannot be sold cheaply due to the current market fundamentals, especially the foreign exchange rates. Importers source their foreign exchange from banks at the prevailing rate, which further influences the final cost to consumers.

The Public’s Concern

Amidst this price hike, concerns have arisen among the public about the impact on their daily lives. Higher fuel prices has led to increased transportation costs, affecting the overall cost of living. Additionally, businesses that rely heavily on fuel now face increased cost challenges, potentially leading to higher prices for goods and services.

Read Also: Bola Tinubu Urges Reps to Allocate N500 billion for Subsidy

Government Response and the Way Forward

As the situation unfolds, the government is likely to face mounting pressure to address the concerns of the public and various industries affected by the price increase. Finding a balance between stabilizing fuel prices and maintaining the deregulated market will be crucial for ensuring economic stability and consumer welfare.

Read Also: Tinubu’s N8,000 Palliative May Increase Poverty Level

The Federal Governments’ initial response aimed at reducing the harsh impact of the oil subsidy removal, has been met with stiff criticism by the masses.

In a nutshell

The sudden increase in petrol pump prices to N617 per litre by NNPC Limited has triggered widespread reactions among motorists and consumers across Nigeria. While the national oil company has not disclosed the reasons for this move, it appears to be related to the falling value of the Naira and the cost of fuel imports. As the public grapples with higher fuel costs, the government and relevant stakeholders must work together to find solutions that balance the interests of all parties involved.

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