The cost of petrol in Nigeria is expected to rise significantly following the expiration of the Crude-for-Naira agreement between NNPC Limited and Dangote Refinery.
This development, coupled with increasing global crude oil prices, signals tougher times ahead for consumers across the country.
Expired Agreement, Rising Costs
The six-month agreement, which ended in March, enabled the NNPC to supply crude oil to the 650,000-barrel-per-day Dangote Refinery with payments made in Naira.
This deal had played a role in stabilizing fuel prices, reducing them from over N1,000 per litre to about N820 in various regions. However, the failure to renew the deal has led Dangote Refinery to halt the sale of petrol in Naira, forcing marketers to source crude at international rates.
New Petrol Prices Across Nigeria
As a result, petrol pump prices have surged, with new rates reflecting location-based variations:
- Lagos: N930 per litre
- South-West States (Ogun, Oyo, Osun, Ekiti, Kwara, Ondo): N940 per litre
- South-South & South-East States (Edo, Abia, Akwa Ibom, Bayelsa, Rivers, Cross River, Enugu): N960 per litre
- Abuja, Kaduna, Benue, Kogi, Niger, Sokoto, Kebbi, Nasarawa: N950 per litre
- Northern States (Zamfara, Kano, Jos, Bauchi, Taraba, Adamawa, Borno, Katsina, Jigawa, Gombe, Yobe): N960 per litre
Additionally, private oil depots have increased their prices to N900 per litre, further compounding the price surge at retail stations.
Marketers Warn of Further Increases
Oil marketers predict that petrol prices will continue to climb unless the Federal Government intervenes. Chinedu Ukadike, Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), warned that currency fluctuations and the need to source crude in dollars will push prices even higher.
He further noted that some marketers might start selling petrol in dollars, exacerbating economic challenges.
Economic Ripple Effects
The rising fuel costs will inevitably lead to higher transport fares and increased prices of goods and services.
According to Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), many marketers struggle with foreign exchange rates, impacting fuel distribution and availability.
Muda Yusuf, CEO of the Center for the Promotion of Private Enterprise (CPPE), emphasized that the fuel price hike would worsen inflation, affect household welfare, and undermine investor confidence.
“Any increase in energy costs will drive up production and distribution expenses, leading to higher inflation rates,” he said.
Calls for Government Intervention
Industry stakeholders urge the Federal Government to revive the Crude-for-Naira deal to prevent further disruptions in the market. Okanlawan Olanrewaju, National PRO of IPMAN, suggested strengthening the policy to ensure stable fuel pricing and availability.
He also encouraged more investments in domestic refineries to reduce reliance on imported petrol.
Consumer Reactions
Nigerians have expressed frustration over the looming price hike. Marcus Ojie, a Bolt driver in Abuja, noted that transportation fares would increase, making it harder for passengers to afford rides.
Similarly, John Yangabe, a civil servant, highlighted the need for government intervention, emphasizing that stable local refineries would benefit the economy.
Conclusion
With the fuel price surge threatening various sectors, the government faces mounting pressure to act swiftly. Renewing the Crude-for-Naira agreement or adopting alternative solutions could provide relief to millions of Nigerians grappling with rising costs.
Until then, consumers should prepare for higher expenses in the coming weeks.
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