…hail revamp of Port Harcourt, Warri refineries
The last quarter of 2024 came with surprises that intrigued many Nigerians, which they also hoped would be sustained to lessen their burdens in 2025.
From the commencement of operation of Port Harcourt (old) Refinery, to the Warri Refinery and celebrating the festive season without fuel scarcity, the last quarter of 2024 started and ended with good news for Nigerians.
It was good news because the rest quarters of the immediate past year witnessed incessant hike in the pump price of premium motor spirit (PMS), popularly known as fuel or petrol, with the attendant hike in the prices of commodities, especially food items and transport fares, subjecting many to untold hardship.
Of course, the hike in electricity tariff also did not help as consumers now pay more for supply that is not as stable as promised by the Discos, considering the frequent collapse of the national grid.
Having endured the economic reforms of the present administration for almost two years now and suffered more in the hands of profit-seeking oil marketers and black market racketeers, many Nigerians hope for respite this 2025.
Many also see a glimmer of hope ahead of 2025 as long as there is no increase in fuel pump price this year, considering that two government refineries and a private one are in operation now.
“With the way the Bola Tinubu’s administration was going after revenue, I never thought that fuel pump prices would come down. It is a shock, but it has to be a better shock if Mr. President and Mele Kyari do not turn around to start increasing prices again.
“We are anticipating prices of things to start coming down as fuel price is reducing. If the government maintains the price reduction, the economy will begin to stablise this year,” Ambrose Eghugese, an entrepreneur, said.
Eghugese, who retired from a first-tier bank in 2021 to set up a bakery and sachet water factory in Agbara, Ogun State, noted that fuel price is still very high at N925 per litre, but further reduction in the price this year will ensure stability in the market as producers often benchmark their prices with cost of raw materials and transportation.
“We small scale business owners are happy that fuel price is coming down, we hope it will continue to come down this year because our consumers are already asking when will the price of bread come down as President Tinubu has reduced fuel price. But we need the price of diesel to come down too, that is what powers our big generators,” he said.
Pius Unanka, a father of three and an operations manager at a fast-moving consumer goods company, foresees a better 2025 if the government and the managers of the economy are intentional about price stability to check inflation, starting with petrol price.
Read also: Manufacturers feel the heat of rising energy costs
“Last year, prices of goods were increasing per minute because businesses were responding to the government’s incessant increase in fuel pump price. But as fuel price, which has been the chief reason for the hikes, is coming down, we expect prices of goods to come down too, starting with transport fare. People are beginning to demand price reduction now, especially on transport fares,” Unanka observed.
He argued that most commercial bus drivers who are insisting that the fuel pump price reduction is negligible, would increase fares if fuel is increased by the same amount, hence they have no reason not to reduce their fares when fuel pump price reduces.
For a better 2025, he thinks that the price reduction should be across all petroleum products, including diesel, which small scale and large companies use to power their daily operations.
“We spend millions on both regular electricity and diesel every month. I think that a stable electricity supply is what large companies need this year in order to save on the high diesel and the high cost of buying and maintaining generation sets.
“The government and electricity consumers should insist on a stable power supply, especially now that tariffs are high and will likely go up again,” Unanka said.
For Onyewuchi Akagbule, a senior lecturer at the Nnamdi Azikiwe University, Awka, one can easily project a better year ahead, considering that our refineries are working now, importation of fuel would be reduced if not stopped and pump price is likely not going to be increased this year.
“The pump price reduction, though small, is a good development for our economic recovery this year because our inflation rate soars at every increase in fuel pump price.
“So, if our government and the NNPC reduce price further or manage to maintain the current fuel price, there will be price stability of goods this year and it will boost the impact of the economic reforms,” Onyewuchi said.
Toeing the same line with the university don, Kike Afere, an economist, noted that the 2025 budget will make less impact if inflation keeps soaring this year, hence stable fuel price will go a long way in stabilising prices of other commodities and reducing the high cost of living.
“I learnt that the Kaduna Refinery will be operational soon. So, with two refineries on, and Dangote on board, I don’t see why Nigeria will import fuel this year.
“But we need the prices of all petroleum products to come down, not just PMS. Diesel for companies, kerosene to reduce pressure on cooking gas, and aviation fuel to address the incredible hike in airfares.
“If our government can do this, we will enjoy price stability and start smiling again this year,” she said.
As the sectors of the economy are interconnected, Afere noted that stability in electricity supply is also key this year.
According to her, businesses and consumers have no reason buying generators or spending on fuel and diesel to power them if there is stability in electricity supply.
“For a better 2025, the consumers should demand more from the Discos and the government should hold the Discos accountable for not supplying stable power despite the hike in tariff. The tariff can be reversed if supply is not met.
“Last year, one of the Discos was reeling out profit it made at the expense of the consumers it barely served. What is the essence of profit when service is not optimal?
“We need stability in fuel price and power supply to boost the economy this year. Without this needed stability, the huge 2025 budgetary allocations will make less impact,” she noted further.
Also, Akagbule, who monitors local commodities price trends, noted that in the last decade, businesses have been fast to adjust or increase their prices at any increase in fuel pump price and reluctant to reduce when the government reduces price.
“I see stability in the price of commodities this year as long as fuel pump price does not increase because businesses will have no reason to increase prices when there is no hike in fuel price, which is usually their excuse,” he said.
For most observers and concerned Nigerians, the people have suffered enough last year and need respite, which they insisted should start in 2025 with no further increase in fuel pump price and stable electricity supply.
The regime of price hikes
It would be recalled that before President Bola Tinubu’s inauguration on May 29, 2023, fuel retailed at N198 per litre and skyrocketed to N540 after the Presidential Inauguration.
On July 18, 2023, the pump price surged from N540 to N617 per litre, just two months after President Tinubu’s inauguration, plunging the nation into a severe cost-of-living crisis, with citizens struggling to afford necessities. Small businesses were forced to increase prices, transportation costs skyrocketed, and food prices became unaffordable for many.
On September 3, 2024, the NNPC hiked the pump price from N617 to N897 per litre, a staggering 45 per cent increase.
On October 9, 2024, Nigeria’s fuel prices surged from N898 to N1,030 per litre as official price. The increase followed NNPC’s exit as the middleman in the Dangote Refinery fuel purchase deal. However, fuel stations sold between N1,200 to N1,500 with few stretching it to N1,700.
Previously, NNPC was the sole buyer of fuel from Dangote Refinery, absorbing a subsidy of N133 per litre to bridge the price gap between the refinery’s price and the retail price.
Now, marketers negotiate prices directly with the refinery under a ‘willing buyer, willing seller’ arrangement, similar to diesel and kerosene pricing.
With its 650,000 barrels per day capacity, Dangote Refinery began processing petrol in September, initially with NNPC as its sole off-taker, according to Devakumar Edwin, Vice President at Dangote Industries.
On December 21, 2024 NNPC announced a reduction in the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol, from N1,020 to N899 per litre.
The announcement coincided with Dangote Refinery’s partnership with MRS, which has set the retail price of petrol at N935 per litre across its outlets nationwide. This followed a reduction in its ex-depot price from N970 to N899.50 per litre
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