The average retail price for a litre of Premium Motor Spirit (PMS) also known as petrol, more than tripled in one year, according to the National Bureau of Statistics.
The latest PMS price watch report showed that the price of petrol rose by 226.2 percent to N626.2 in September 2023 from N191.6 in the same period of last year.
“Likewise, comparing the average price value with the previous month (.i.e. August 2023), the average retail price decreased by 0.08 percent from N626.7,” the report said.
It said Taraba had the highest average price for petrol which stood at N665.6 in September, while Bornu and Benue states had N657.4 and N641.3 respectively.
Rivers (N602.6), Delta (N605.9) and Jigawa states (N617.4), recorded the lowest price.
“Lastly, on zonal profile, the North-East had the highest average retail price of N638.3, while the South-South Zone had the lowest price of N618.5,” the NBS added.
The removal of the petrol subsidy in May this year by President Bola Tinubu , tripled the petrol price to N617 from N184, causing public transportation providers such as buses, tricycles and motorcycles to raise transportation fares.
“It is getting difficult daily for Nigerians, especially with the petrol subsidy removal and other reforms that the president has done. They are good reforms but they are seriously hurting Nigerians and businesses,” Collins Osho, a civil servant and photographer, said.
Petroleum product dealers also indicated that filling stations were closing down in huge numbers on a daily basis because the industry was getting increasingly difficult to maintain.
According to them, this could lead to widespread gasoline scarcity in the coming months. It was also gathered that the cost of importing petrol into the country has risen to N720 per litre, up from N651 per litre in August of this year.
“Depot owners are so terribly affected by the increasing cost of crude oil and exchange rate, to the extent that many depots are practically deserted as their owners are unable to secure bank loans to fund their business due to high-interest rates,”Benneth Korie, the National President of Natural Oil and Gas Suppliers Association of Nigeria, said.
He said that the worst hit are filling stations whose owners find it difficult to secure funds to procure products for their retail outlets.
The hike in petrol price was a major contributing factor to Nigeria’s headline inflation rate which rose to 26.72 percent in September, the highest in 18 years, from 25.80 percent in August.
The World Bank said in June that inflation pushed an estimated four million more Nigerians into poverty in the first five months of this year.
“In the immediate term, the removal of the petrol subsidy has caused an increase in prices, adversely affecting poor and economically insecure Nigerian households,” it said.
It added that among the poor and economically insecure, 38 percent own a motorcycle and 23 percent own a generator that depends on petrol and that many more use petrol dependent transportation.
Petrol prices also increased the logistic cost of food products across the country.
“Everything is now expensive. Before one carton of titus sells for N30, 000, but now it is being sold for N40,000,” Bintu Obilaja, a Lagos-based fish seller, said.
Afolabi Mojeed, a Lagos-based businessman with a family of five, told BusinessDay that he reduced the portion of food that his family consumes to adjust to recent economic realities.
“Early last year I could conveniently buy a loaf of bread and a derica of rice for a little over N1, 000, but presently, just a derica of rice costs N1, 000. Now we eat more beans because it is cheaper, but we cook it on a charcoal stove to save gas,” he said.
Unsurprisingly, food prices increased on the underlying factors such as the pass-through effect of elevated PMS prices on food prices, higher input costs, and conflicts in the Northern region of the country – remain intact, according to analysts at Cordros Securities.
A latest Global Hunger Index (GHI) said Nigeria is among the nine countries expected to see its hunger levels worsening throughout the year
Apart from Africa’s most populous nation, the Index, a tool for comprehensively measuring and tracking hunger at global, regional, and national levels highlighted Afghanistan, Haiti, Somalia, South Sudan, Sudan, Yemen, Burkina Faso and Mali as the other countries.
“Many countries are experiencing severe hunger in 2023, with the situation expected to worsen throughout the year. Though circumstances in 2023 are not yet captured by the data in this year’s GHI scores, early warning resources indicate that many areas of the world are in crisis,” the index report said.
It said while conflict and climate change are key drivers of these crises, economic downturns are an even more pervasive factor.
“Nigeria ranks 109th out of the 125 countries with sufficient data to calculate 2023 GHI scores. With a score of 28.3 in the Index, Nigeria has a level of hunger that is serious.”
Nigerians have taken measures to deal with the transportation costs such as reducing the quantity of food or the number of times they eat daily.
Ride-hailing drivers say the increment in transportation fares has pushed many of them out of business as many customers now have to cancel their trips or take commercial buses due to the high increase in fares.