The pains of cash-strapped Nigerians have continued to increase as the energy prices in Africa’s biggest economy keep rising.
The average retail price of Automotive Gasoline Oil (AGO), also known as diesel paid by consumers in July 2022 increased to N774 per litre, from N251 in July 2021, indicating an increase of 209 percent, according to the National Bureau of Statistics (NBS).
On a month-on-month basis, it also increased by 5.5 percent from N734 per litre in June.
For Premium Motor Spirit (PMS) also called petrol, its average retail price increased to N190 per litre in July 2022 from N165.9 recorded in the same month of last year, indicating a 14.5 percent increase. On a month-on-month basis, the average price for petrol increased by 8.1 percent from N176 per litre in June.
A supervisor at continental waste managers Limited, who simply identified himself as Ekene, said the ongoing energy crisis was taking a toll on the businesses.
“The price of diesel jumped from N240 in February to N750 in recent times, as some filling stations sold for N800,” he said.
“Today, we bought diesel for N785 per litre, as our business involves about 80 percent transportation with diesel engine trucks. On average, we spend N80, 000 to get diesel in a day,” he further added.
Chisom Okafor, a resident of Lokogoma, in Abuja, said petrol price has gone up by N20 in her area.
She told BusinessDay that she purchased petrol from AYM Shafa filling station last week at N185 per litre.
Experts placed this development on global oil market price, foreign exchange, and Nigeria’s inability to refine internally.
The increase would be due to Higher Intercontinental Exchange (ICE), Platts and crude oil prices and the parallel rate of exchange increase as well, says Jide Pratt, an oil and gas expert.
According to Pratt, traders are also increasing margins/freight due to lower supply due to the Ukraine/Russia situation.
“The main issue is to stimulate Foreign Direct Investment which sadly is not happening enough. There should be an intervention in foreign exchange for the Major Oil Marketers Association of Nigeria (MOMAN),” he said.
For Bala Zaka, an oil and gas expert, the solution to the country’s energy crisis is straightforward.
“I feel pain when I hear people align Nigeria’s inability to generate energy through refined petroleum products to the Ukraine-Russia crisis. Ordinarily, it should not be so.
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Crude oil-producing nations, which have internal refineries, are not complaining because they are internally refining and exporting the remaining ones, making so much money.
Zakka further said the reason for the complaint in Nigeria is because the country could not refine internally, and distribute, as the state-owned refineries are dead.
“So we rely on buying crude oil at international prices. Countries that are supposed to be complaining are countries without crude oil and countries that do not have refineries.”
Meanwhile, Zainab Ahmed, minister of finance, budget, and national planning, last week said the Federal Government of Nigeria spends N18.4 billion on petrol subsidy daily. “If you are projecting for the full year, from January to December, it will be N6.7 trillion.”
However, Ahmed said the government had now planned for subsidy payment for only half of next year, as contained in the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper.
The NBS report also highlighted that in terms of states, Niger recorded the highest average retail price for petrol with N208, followed by Adamawa with N207.6 and Nasarawa with N206.
Edo had the lowest average retail prices for petrol with N174, followed by Imo with N176 and Bayelsa with N180.
In addition, analysis by zone showed that North-Central recorded the highest average retail price in July 2022 with N194, while the South-South had the lowest with N184,
For diesel, the highest average price was recorded in Plateau with N866, followed by Oyo with N860, and Ebonyi with N851. The lowest price was recorded in Yobe with N687 followed by Katsina with N695 and Gombe with N722.
Furthermore, analysis by zone showed that the South-East had the highest price with N803, while the North-East recorded the lowest price with N748.
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