• Friday, March 29, 2024
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BusinessDay

South Africa raises petrol price 4th time in 2021 as Nigeria remains silent

Mele Kyari

Unlike Nigeria juggling a promise to eliminate costly petrol subsidies and public outcry against any increase in petrol pump price, motorists in South Africa are bracing themselves for a record-high increase in the price of fuel as high as R17.32 ($1.19), that is, N453.69 for a litre in April 2021.

In South Africa, petrol prices have increased by R1 a litre beginning from April, which means consumers will pay around R17.32 ($1.19) a litre inland and at least R16.64 ($1.14) N434.62 per a litre on the coast.

For motorists in South Africans, this is the fourth consecutive fuel price hike this year due to rising international oil prices, which offset the benefits of the rand firming against the dollar.

“The average Brent Crude oil price increased from $61.10 to $64 per barrel during the period under review,” South Africa’s Department of Mineral Resources and Energy (DMRE) said on Friday.

Apart from South Africa, data sourced from GlobalPetrolPrices.com as of April 5 2021, showed fuel prices in other countries are increasing depending on different factors (tax, freight and exchange rates).

For instance, fuel price in Saudi Arabia has increased to N207, Egypt fuel prices have also increased to N208 a litre, Russia is at N242 per litre. Togo and Ghana stand at N291 and N355 respectively.

Unlike other countries having a deregulated downstream system, raising pump prices is politically risky for Nigeria’s leaders. For decades, the government has intervened in the market to ensure the public can purchase cheap fuel – widely considered the single dependable advantage from the country’s misspent oil wealth.

The Nigeria National Petroleum Corporation (NNPC) is the sole petrol importer in the country and is taking the hit by not increasing the price at which it sells to the firms that distribute the fuel around Africa’s most populous nation.

The pump price of petrol should be about N200 per litre, compared to just over N160 per litre that it retails at, according to Tunji Oyebanji, the chairman of the Major Oil Marketers Association of Nigeria and chief executive officer of 11 Plc, a large operator of filling stations.

“I don’t see how NNPC can survive if it has to finance that kind of gap,” Oyebanji said in a speech on Feb. 25.

In mid-February, fuel marketers estimated petrol was costing NNPC some N1.2 billion ($3.2 million) per day, a huge risk to government finances. Eliminating subsidies was among conditions for a $1.5 billion World Bank budget support loan.