There is renewed concern that the prices of Premium Motor Spirit (popularly known as petrol), Automotive Gas Oil (diesel) and other refined petroleum products may shoot up soon.
The fresh scare is coming in the wake of increase in the cost of international crude oil prices, including Brent which hit $81.09 per barrel (pb) on Monday, January 13, as against about $76 just last week even as the Federal Government’s 2025 budget proposal estimates a benchmark oil price of $75 pb.
Brent price increase arose from tensions such as sanctions slammed on Russian oil exports, which sparked supply concerns.
In Nigeria, it is feared the oil price increase could affect the ex-depot prices of refined petroleum products across depots.
Already, indications are that marginal adjustments have begun to be made, as of last weekend, with diesel price notching N1120 per litre (pl) as against N1050 recently in many depots.
The hike shows a N70 increase.
All these are happening even as the landing cost of petrol hovered about N887.51 pl as of December,2024, with the increase in global fuel prices potentially triggering a hike in landing cost soon and thus, a multiplier effect on consumer end of the vital product retail chain in Nigeria.
Though petrol price has recorded a recent reduction in the country with both Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery declaring ex-depot price slashes last year, with retail plummetting to between N935 and N965 pl from N1040 pl, there is little or no concrete assurance to guard against price rise shocks arising from global oil price increase.
Presently,Nigerians purchase petrol at between N935 to N1,100 pl.
It is a given in the country -in view of its mono-cultural economy that depends mainly on sale of crude for huge national revenue receipts -, that any hike in petrol pump head prices directly affects the already inflated prices of goods and services with the latest food and headline inflation rates standing respectively at 39.93% and 34.60 %.
Many working class persons are already complaining that the new national minimum wage of N70,000 monthly cannot take them home in an economy where a 50kg bag of rice, a staple in Nigeria, goes for about N100,000 and the cost of other household items, foodstuffs,rent, children’s school fees, transportation, medical payments,clothing, and other basic needs have made nonsense of the purchasing value of the wage.
