Despite the government’s promises of relief, Nigerians have had to deal with a 400% increase in gasoline prices in the three months since President Bola Tinubu announced the subsidy’s removal.
Although President Tinubu has assured us that the price of PMS will not rise any more, an increase in the price of crude oil on the international market might have a significant impact on how much we pay at the pump.
At $94 a barrel, the international price of crude oil is at a 10-month high. As demand rises in the winter, market watchers predict the price will rise above $100.
This increase used to be reason for celebration because it meant more money for the Nigerian government, but now it could imply higher gas prices for ordinary Nigerians.
President Tinubu assured the public last month that prices will be held steady by “addressing the inefficiencies within the midstream and downstream petroleum subsectors to maintain prices where they are without having to resort to a reversal of the administration’s policy in the petroleum industry.”
NNPC Retail, according to Group Chief Executive Officer of NNPC Limited Mele Kyari, has been making moves to acquire large market shares in the downstream sector in order to have control of the downstream market, as reported by some members of the House of Representatives on Friday.
It was in December when NNPC Retail bought Oando Limited’s retail operations.
Kyari claims that the arrangement gives NNPC Retail 30% of the market and the ability to control pricing by monopoly. He said that while NNPC Retail won’t raise rates, other petroleum marketers will have to keep their own prices stable.
A short line formed a few weeks ago in Lagos, Nigeria, after one company raised their prices by N7. The result was predictable: a snaking line at our gas stations. This safety is ensured by the PIA.
That people in Nigeria will be able to make their own decisions and avoid being exploited. We plan to act as the market’s stabilizer. He pledged to end market instability and protect Nigerians from exploitation.
Despite the President and the oil chief’s reassurances, Nigerians continue to worry about the increase, especially in light of the recent liberalization of the industry.
Economist Dr. Babatunde Adeniran speculates that a hike is likely given the current state of supply and demand on the global market.
“Yes. According to Adeniran, when asked about the likelihood of a price increase, a price increase is unavoidable since “they” (marketers) modify prices according to the market reality, i.e. forces of demand and supply.
Energy alternatives
To lessen the blow of the subsidy cut, President Tinubu pledged in a nationwide broadcast in August to spend N100 billion in CNG buses.
President Buhari said that N100 billion will be allocated to the purchase of 3,000 CNG-powered, twenty-seater buses, which would be distributed among all 36 states over the course of the following nine months.
Adeniran demanded that the government help the people by subsidizing the CNG kits.
Finding a renewable energy source is one way to lessen the impact. The CNG is one such option. It’s still the greatest option because it’s less expensive and less polluting than alternatives.
But the government can help by providing funding for the CNG conversion kit. More people will support this if the government is successful in doing so.
We currently flare a lot of gas, but Nigeria has the capacity to supply the demand. “We can divert the gas into CNG, which would be more productive than flaring it,” he said.
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