By Taiwo Adebowale
LAGOS, Nigeria — In a bold and unexpected twist, the Nigerian National Petroleum Corporation Limited (NNPCL) has once again raised the price of Premium Motor Spirit (PMS), commonly known as petrol. This time, the national oil firm has set the pump price at a staggering N1,060 per litre in Abuja and N1,025 per litre in Lagos—a mere three weeks after a prior increase. This sudden hike has ignited a wave of frustration among Nigerians already grappling with crippling inflation, a devalued currency, and an increasingly high cost of living.
Across social media and within organised sectors, Nigerians are sounding an alarm. The reaction is one of collective outrage as consumers and experts alike brace for the cascade effect this will have on transportation, goods, and services across all industries. With each adjustment to the fuel price, the economic squeeze tightens, leading many to question the NNPCL’s commitment to the welfare of the Nigerian people. Critics argue that the oil behemoth’s pricing strategy, compounded by governmental policy changes, is exacerbating the nation’s fiscal crisis, pushing even more Nigerians toward economic hardship.
The Cost of Deregulation: Is This Truly Market-Driven?
This latest price hike is part of the Nigerian government’s deregulation policy, intended to allow the price of petrol to reflect true market dynamics. However, the recent surge in prices contradicts international trends, as crude oil prices have dropped nearly 8% to $72 per barrel from previous highs. Despite this, NNPCL has continued to impose steep increases on consumers, with the retail price of petrol now hovering at unprecedented levels in a country rich in crude oil reserves.
The rise has not gone unnoticed by key stakeholders in the Nigerian oil and gas sector. Billy Gillis-Harry, President of the Petroleum Retail Outlets Owners Association of Nigeria (PETROAN), expressed concern over the inconsistency in pricing. “The situation is a pathetic one,” he said, emphasising the need for government intervention to stabilise fuel prices. PETROAN has appealed for a N100 billion support fund to mitigate the impact of these price hikes and provide alternative sourcing for PMS. However, the federal government has yet to address these appeals, leaving market stability in a precarious state.
NNPCL and Dangote Refinery Clash Over Pricing Responsibility
One critical aspect of this ongoing crisis is the role of the Dangote Petroleum Refinery, a $20 billion plant in Lekki with the capacity to supply Nigeria’s PMS needs. Alhaji Aliko Dangote, President of the Dangote Group, publicly criticised the continued importation of petrol by NNPCL, despite local production capabilities. During a meeting with President Bola Tinubu, Dangote urged the government to reduce reliance on imports, as his refinery was producing the commodity at home. He clarified that while he provides petrol, he is not involved in retail and expects oil marketers and NNPCL to “come forward and pick” from his production.
This gap between production and retail has been a point of contention, with Dangote affirming that the NNPCL is free to procure fuel domestically rather than sourcing it internationally at a higher cost. In contrast, the NNPCL claims it is bound by logistics and policy restrictions that make importation a more viable, albeit costly, option. This standoff has fuelled public skepticism about the transparency of NNPCL’s pricing, as many wonder why a refinery within the country cannot alleviate the need for importation costs.
Price Hikes: Fuelling an Inflationary Crisis
The NNPCL’s latest price hikes come against the backdrop of record inflation in Nigeria. The inflation rate hit a 28-year high of 34.2% in June 2024, affecting essential goods and services nationwide. Rising petrol prices directly contribute to this economic turmoil, as transport costs surge and, in turn, drive up prices across all consumer goods. This feedback loop leaves no sector unaffected, and low-income households are among the hardest hit.
Many economists argue that Nigeria’s weak currency, rather than global oil prices alone, is the primary driver of this inflationary pressure. Dele Oye, President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), emphasised that the naira’s relentless depreciation undermines any potential benefits from lower international oil prices. “Poor management and ineffective monetary policies by the Central Bank of Nigeria have depreciated the naira to a point where Nigerians cannot enjoy relief, even if global prices drop,” Oye explained.
Oye also critiqued the current administration’s policy approach, which he believes lacks a sustainable framework for currency stabilisation and energy pricing. He warned that without a focus on the naira’s value, “we will continue to bear the burden of escalating costs,” and appealed for a shift in monetary policy that could alleviate inflation without further straining Nigerian consumers.
Civil Society Laments Inequitable Policy and Calls for Subsidy Reform
Civil Society Organisations (CSOs) have not remained silent in the face of these ongoing challenges. The Civil Society Legislative Advocacy Centre (CISLAC) criticised the government’s policy decisions, especially the removal of subsidies, which they argue were supposed to protect the economically vulnerable. CISLAC Executive Director, Auwal Musa Rafsanjani, called on the government to tackle corruption and tax evasion, particularly among wealthy individuals and multinational corporations, instead of further burdening the populace with rising costs.
Rafsanjani argued that subsidies are a common international practice designed to shield citizens from market volatility. “In countries around the world, governments provide subsidies on fuel, transportation, agriculture, and healthcare because they recognise their citizens’ needs,” he said. CISLAC urged the Nigerian government to consider reintroducing subsidies or, at the very least, block corruption in the sector, as a means to relieve the immense financial strain on Nigerians.
The High Price of Policy Inaction
For the average Nigerian, these price hikes have not only exacerbated their daily struggles but have also ignited feelings of frustration toward the government’s policy stance. Civil society leaders and economic analysts are urging the government to adopt reforms that prioritise the needs of ordinary citizens rather than focus solely on revenue generation.
Dr. Muda Yusuf, Director of the Centre for Promotion of Private Enterprise, highlighted the delicate balance required between economic reforms and public welfare. “The Nigerian economy is highly vulnerable to energy price fluctuations and exchange rate volatilities,” he noted. “While reforms are necessary, they must be implemented in a way that doesn’t leave the most vulnerable behind.” Yusuf called for a balanced approach that considers not only commercial and fiscal objectives but also social inclusion, urging policymakers to remember that economic progress is unsustainable without a foundation of public support and social welfare.
Nigerians Take to Social Media: “Enough is Enough”
In the face of this unending hardship, Nigerians have taken their frustrations online. On social media, users decried the relentless price hikes, labelling the government as out of touch with the challenges of the average Nigerian. Many expressed anger at President Tinubu’s perceived inaction, while others criticised NNPCL’s lack of transparency in its pricing strategy.
A user, Godwin Onoghokere, summed up the sentiment by posting, “The government is bleeding us dry. Fuel was supposed to become cheaper with local production, but instead, it’s the opposite. Enough is enough!” Such statements reflect a growing disillusionment and a call for urgent government accountability.
Can Nigeria Escape the Fuel Price Trap?
As oil prices remain volatile globally, Nigerians are now grappling with the likelihood of more increases. For a country that relies on PMS for nearly all forms of energy and transport, this spells even greater financial hardship, with no relief in sight. Experts warn that unless there is a paradigm shift in both economic policy and governance, Nigeria will continue on this trajectory of rising costs and mounting public dissatisfaction.
The situation also casts a shadow over the Nigerian government’s ambitious goals for self-reliance in energy production. The Dangote Refinery, once touted as a solution to the country’s fuel challenges, has yet to provide the relief expected. The promise of cheaper, locally produced fuel remains unrealised, as logistical bottlenecks, policy inertia, and the weakened naira exacerbate fuel costs.
A Nation in Economic Peril
The NNPCL’s decision to raise petrol prices to N1,060 per litre has triggered widespread public dissent, and the repercussions of this hike will reverberate through every sector of the economy. As Nigerians brace for further economic hardship, the government faces an escalating crisis of trust and credibility. With inflation at record highs, the naira in free fall, and petrol prices soaring, the need for a comprehensive, people-centred approach to economic reform has never been more urgent.
The Nigerian government stands at a critical juncture, facing mounting pressure to implement sustainable solutions that address not only fiscal objectives but also the basic needs of its citizens. Without decisive action, this latest fuel price hike will be remembered not merely as an isolated policy decision but as part of a broader economic mismanagement that has left Nigerians struggling under the weight of unfulfilled promises and rising costs.
