Yuletide: Nigeria breaks petrol scarcity jinx

…Death of monopoly enthrones new order, but like ‘Oliver Twist’, citizens want further price cut

Over the years, fuel scarcity and surge in pump price of premium motor spirit (pms) had always marked every yuletide, and citizens seemed to accept it as the way of Christmas and new year.

Now, 2024 yuletide has come and is about going without fuep price hike. Whether citizens rejoiced over this or not may not be the issue, but attention seems to shift to why fuel prices did not surge. More importantly, however, citizens have begun to demand for further price cuts and have launched a debate about appropriate fuel pump price in the face of return of local refining.

In the days running to Christmas, Dangote Refinery Limited, which has been in a running battle with both seen and unseen forces especially in the Nigeria National Petroleum Company Limited (NNPCL), announced two price reductions down to N976 per litre and finally to N935 (exclusive to MRS Oil). This was believed to have prompted the NNPC to announce a slight reduction to N965. In other filling stations in Port Harcourt, fuel still sells between N1060 and N1080 per litre.

Read also: MRS Oil drops petrol price to N935 following Dangote Refinery partnership

Secret of fuel price reduction:

It was then President Goodluck Jonathan who said when he tried to remove fuel subsidy that price would go up actually but that competition would bring it down gradually. Most of the masses did not want to hear such logic. Now, fuel subsidy has been removed 12 years later, prices went up, now prices are crawling down. That’s is all the secret there is.

High prices will hint profit, profit or investors go where there is profit; then, competition surely brings down prices. It is a natural economic rule. Many also forgot that Jonathan later cancelled the subsidy removal but issued licenses to Dangote and five others though Nigerians were not impressed by the action because of over 20 licenses issued by Olusegun Obasanjo that did not lead to building of refineries. The licencees had argued that without removal of subsidy, banks were refusing to fund the licences into refineries. Jonathan then promised to remove subsidy the moment any local refinery was ready with locally refined fuel. That was where the matter remained until Bola Ahmed Tinubu came to power and swept off subsidy which provoked rash price hike and today’s inflation rate of over 33%.

The only fuel in circulation when Jonathan removed subsidy was imported ones. Now, there are two local brands (Dangote and Old Port Harcourt). It is not clear what has happened to imported one. Now, the predicted price reduction seems to have started.

That could explain why for the first time, there is no fuel scarcity, and there is no fuel price hike. Transport however increased marginally but transporters said it is not due to fuel price increase at yuletide but due to surge in depand.

Oliver Twist:

Nigerians heaved a sigh of relief that fuel was not only coming down gradually but was not going up the way it when importation was taking place.

They now realized their hunger for further price cuts. Ilaye Jumbo, a public commentator in Port Harcourt, said the most important material for any kind of production is the raw material, and that when the raw material is readily available for production, every other aspect can be sorted out. She thus suggested that the price for PMS should go back to N65 per litter because Nigeria has all that is needed for local refining.

She pointed to locally refined crude by artesenal refiners in the creeks is stored in a bag, loaded in a truck around Bende Street in town axis of Port Harcourt and exported to unknown places (Many suspect its Cameroun by water).

She argued that Nigeria has what it takes to sell pms at N65 per litre, but that corruption in that sector is the bane of the development.

Another analyst, Dimkpa Alikor, suggested that PMS pump price should sell for between N450 and N500 per litre, but did not give the reasons and calculations that gave the figure.

Whatever the case, members of the public and analysts seem to wait for industry experts and insiders to come up with what appropriate pmp pricing should be in the face of return of local refining.