The average retail price paid by consumers for Premium Motor Spirt (PMS), also known as petrol, surged to more than 100 percent in one year, according to the National Bureau of Statistics (NBS).
The latest PMS price watch report showed that the price of petrol rose by 157.57 percent, to N679.36 in February 2024 from N263.76 in the same period of last year.
“Likewise, comparing the average price value with the previous month (.i.e. January 2024), the average retail price also increased by 1.66% from N668.30,” the report said.
On state profile analysis, the report stated that Zamfara State had the highest average retail price of petrol, at N750.43, while Kebbi and Taraba States were next, with N746.67 and N710.56, respectively.
Kwara, Ogun and Benue States had the lowest average retail prices for Premium Motor Spirit (Petrol), at N650.00, 650.83 and 652.73, respectively.
“Lastly, on the Zonal profile, the North West Zone had the highest average retail price of N701.20, while the South West Zone had the lowest price of N657.20,” the report added.
President Bola Tinubu announced the removal of the petrol subsidy during his inauguration speech on May 29, 2023.
This declaration tripled the petrol price to N679.36/litre from N184/litre, causing an increase in transportation fare, food items and other services.
“Right now, to fuel my car costs N25,000 for a full tank, which lasts two weeks. That’s about N50,000 per month, which consumes a significant chunk of my monthly income.
“So, I reduce fuel consumption by reducing distanced travels; I stay at home unless necessary, and I reduce the rate at which I take the car out or use an alternative means of transportation,” Ameer Akintola, a petrol consumer in Lagos told BusinessDay.
AbdulHameed Otubanjo said, “We used to buy enough petrol to last a night, but now, we set a time to switch on the generator. As a designer, it is frustrating to keep up with deadlines, and I maximise electricity when it is available,” he said.
Idris Bisiriyu, a creative in Lagos, said he intends to rely on solar energy to keep his business stable.
“As a creative who depends on consistent power for a smooth business, I’m considering setting up a solar system. The amount of money I will expend on petrol in a year can set up one, and I can use it for as long as I want. I plan on minimising interactions with petrol and diesel to avoid frustrations,” he said.
On the impact of rising petrol costs on petrol businesses, Titilope Anifowoshe, a petrol station owner, said that tank farms and filling stations are grappling with substantial expenses on fuel to sustain their business.
“The surge in petroleum products coincides with a challenging period for players in the downstream sector. Given the costs and slim gap between landing costs and profit margins, businesses are struggling to stay afloat.
“It is crucial to address the issues of forex and the declining value of the naira. With generator diesel consumption claiming almost 60 percent of profits for filling stations, businesses are under pressure,” she said.
In June 2023, The World Bank revealed in its Nigeria Development Update that the removal of the petrol subsidy has caused an increase in prices, adversely affecting poor and economically insecure Nigerian households.
The World Bank said, “Petrol prices appear to have almost tripled following the subsidy removal. The poor and economically insecure households who directly purchase and use petrol and indirectly consume petrol are adversely affected by the price increase.”
“Among the poor and economically insecure, 38 per cent own a motorcycle, and 23 per cent own a generator that depends on petrol. Many more use petrol-dependent transportation.
“Many current, as well as newly poor and economically insecure households, will likely resort to coping mechanisms that will have long-term adverse consequences, such as not sending children to school, or not going to the health facilities to seek preventative healthcare or cutting back on nutritious dietary choices,” it added.
Elijah Oluwaseun, a family man in Lagos, said that the current economic status of Nigeria has led him to pull his two children out of school, and they have been at home for almost two months.
Oluwaseun said, “The school first sent my children out of school at the beginning of January, so I decided to take a loan from these loan apps to pay some of their school fees. I hoped the money I paid would keep the school from sending them away again, but since I couldn’t complete the payment they sent them home.”
“Now my kids are at home, and the loan apps I borrowed from have been disturbing me and sending threatening messages, but I can’t even pay them because my company still owes about three months of salary,” he added.
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