Nigerian consumers heaved a sigh of relief last December as Premium Motor Spirit (PMS), otherwise known as petrol, was not only accessible, but also sold at government approved price, making federal government’s intentions behind an upward review of petrol pump price fully achieved in 2018, recent data have shown.
The average price paid by petrol consumers fell by 15.1 percent in December 2018 to N145.80 from a year earlier, the lowest since November 2017. When compared to N171.80 consumers paid in the same period in 2017, it represents the biggest monthly drop so far, according to available data from the National Bureau of Statistics (NBS).
This means that Nigerians bought the least expensive fuel during festive season last year since 2015 despite several uproars over a likely reoccurrence of fuel scarcity during the period.
According to the latest PMS data by the statistics bureau, Taraba, Gombe and Bayelsa were states with the highest average pump prices of petrol at N150.27, N150.20 and N150 in December, while Yobe, Bauchi and Jigawa sold the cheapest fuel at N143.33, N144.20, N144.21 in the review month, respectively.
Nigeria was faced with perennial fuel scarcity in previous years, particularly during yuletide when commercial activities were on the rise. This resulted in significant transport fare hikes across the nation with commuters and manufacturers bearing the brunt.
The federal government through the Minister of State for Petroleum Resources, Ibe Kachikwu, in May 2016 announced an upward review of PMS pump price from N86.50 to N145.00 to the effect, and directed filling stations across the country not to sell the product above the fixed price.
The hike was the only way out of the scarcity and exorbitant prices of N150 to N250 Nigerians were subjected to at many filling stations across the country during yuletide, according to Kachikwu.
In spite of this, Nigerians did not only pay outrageous prices for the product, but the fuel was not available to satisfy demands in 2016 and 2017 festive sessions.
Prior to 2018 yuletide, the Group General Manager, Group Public Affairs Division of the Nigerian National Petroleum Corporation (NNPC), Ndu Ughamadu, had assured Nigerians of a fuel scarcity-free yuletide stressing that the corporation had put in the right measure to end the annual scourge. “No cause for worries. We have a robust fuel stock and high efficiency level,” the NNPC spokesman said.
While there are calls on the need to sustain the achievement after next month’s general elections, Rafiq Raji, chief economist at Macroafricaintel, said the sustainable solution to the fuel scarcity remains full liberalisation of the nation’s Oil & Gas sector.
“I think the authorities simply planned ahead knowing the potential negative implications of a scarcity on President Buhari’s re-election prospects,” Raji said. “The sustainable solution remains full liberalisation of the sector.”
Oil-rich Nigeria is Africa’s largest exporter of crude and one of the main producers of the commodity in the world, yet the country imports petroleum products to satisfy its growing demands worsened by a near 3 percent population growth rate.
Ironically, the oil-dependent nation becomes financial weak when crude oil falls and its citizens suffer when prices of the commodity rise in the international market, despite having four local refineries.
High crude prices mean producers would incur more costs to refine petroleum products, translating to an increase in the average pump price of petrol from the government approved amount. However, successive administrations have claimed the government bears extra costs on petrol prices as a way to alleviate the sufferings of the masses.
President Muhammadu Buhari had during the presentation of the 2019 Appropriation Bill to a joint session of the National Assembly last year revealed that a total sum of $1 billion, an equivalent of N305 billion, has been earmarked for under-recoveries by his administration to settle petrol subsidy pay-outs in 2019.
According to NNPC monthly financial and operations report, over N144 billion was recorded as under-recoveries fund in 2017 by the state oil firm, while over N623 billion was spent in 2018.
OLUWASEGUN OLAKOYENIKAN
