• Friday, June 21, 2024
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BusinessDay

Petrol prices up 164.8%, further drains cash-strapped Nigerians

Cheap Nigerian petrol floods West Africa, sells above N1,500

The average retail price of petrol has surged by 164.8 percent since the federal government abolished fuel subsidies in May, placing a heavy burden on Nigerian consumers who are now grappling with significantly higher transportation costs and an overall rise in the cost of living.

Data obtained from the National Bureau of Statistics revealed that the average retail price of petrol in October was N630.63, indicating a 164.8 percent increase from N238.11 in May.

According to the latest Premium Motor Spirit Price Watch report, this development is an indication of a 222.92 percent increase when compared to the N195.29 recorded in October 2022.

“Likewise, comparing the average price value with the previous month (.i.e. September 2023), the average retail price increased by 0.71 percent from N626.21,” the report said.

Prior to the subsidy removal, petrol prices were artificially kept low by government intervention. However, the government argued that the subsidy was unsustainable and that a market-driven approach would be more efficient.

Read also: Petrol price more than triples in one year – NBS

While the decision to eliminate subsidies was met with criticism from some quarters, the government maintained that it was necessary to ensure the long-term viability of the fuel industry.

The federal government said the country has recorded significant strides in salvaging the state of the economy since the reform.

“The Federation Account is witnessing improved revenue inflow since the removal of fuel subsidy from an average of N650 billion monthly to over N1 trillion in the last four months,” said Wale Edun, minister of finance and coordinating minister of the economy.

At the opening ceremony of a two-day retreat for the Federal Account Allocation Committee on Monday, Edun said the economic reforms the administration has embarked on since its inception in May clearly outlined the right steps to the transformation of the country’s economy.

Read also: Petrol price jumped to N626.21 in September – NBS

He said that the government is not oblivious to the untold hardships faced by Nigerians following the removal of petroleum subsidy and harmonisation of the exchange rate, affirming that “all the sacrifices will not be in vain as the government is bent on ensuring that the economy bounces back to normal as we continue to consolidate the recovery efforts on achieving inclusive economic growth and development”.

In addition, the government has acknowledged the challenges posed by the rising petrol prices and has taken steps to mitigate the impact. These measures include providing financial assistance to vulnerable households and implementing policies to promote the use of alternative fuels.

Meanwhile, Zamfara State had the highest average retail price for the product at N659.38; Gombe and Borno states were next with N658.33 and N657.27, respectively.

According to the report, Lagos, Oyo and Delta states had the lowest average retail prices for petrol, at N590.95, N592.19 and N599.38 respectively.