Post Image

In February, Nigerians were hit with something they thought had disappeared for good: a scarcity of petrol. Long queues returned at fuel stations across the country, with motorists and buyers holding fuel kegs waiting for hours to purchase petrol.

Read more about Business
With this came a sharp increase in the price of Premium Motor Spirit (PMS). Previously fixed by regulators at between ₦162 and ₦165 per litre, the product began selling well over ₦200 per litre. People who couldn’t get it at petrol stations turned to the ‘black market’, where prices were often double what was obtained at the stations.

A striking feature of the latest fuel scarcity episode has been the vast difference in the prices at which PMS has been sold. This has been true even within towns and cities, locations just a few kilometres apart.

Nigerians have shared their thoughts about the situation on social media. A deep dive into threads and responses covering it reveals vastly different realities from across Nigeria. It’s not just prices that differ; the availability of petrol has also varied.

Reports From Across The Nation

One Twitter user, Obinna Nwosu, noted that there was no report of petrol scarcity in Abia State. He suggested that this was due to the fact that petrol stations had generally fixed the price of the product well above what was set by regulators.

“There’s no fuel scarcity in Abia State because the fuel stations have officially increased the pump price to ₦195 per litre”, he Tweeted. “What does this mean?”

Others from elsewhere in the South East reported that the product sold at slightly higher prices.

“In Okigwe (Imo State) we pay as high as ₦210,” said a Twitter user named Omekara Emmanuel.

“It’s ₦200 in Ebonyi, and there are no queues here,” said Igwe Chika, another respondent.

“We buy it for ₦220 here in Enugu,” claimed a user who called himself ‘Chinex’.

Others from elsewhere in the country reported a range of prices as well.

“Here in Benin (Edo State) it’s sold for between ₦200 and ₦220,” said a Twitter user named Kelly Odion. “I believe we could get to ₦400 per litre soon.”

“I bought it at ₦240 this week in Ibadan,” said one Funsho Aderibigbe.

Another respondent, Kingsley Ijeh, said that petrol was currently being sold for ₦200 per litre in Lafia, Nasarawa State, “with little or no queue.”

A resident of Kaduna said he had purchased petrol for about ₦250 per litre. He also reported that there were “no queues” there.

However, a Twitter user from Jos countered the original suggestion by Obinna Nwosu that the higher prices were tied to the greater availability of PMS at petrol stations.

“It’s ₦210 in most places in Jos, and the queues are still unbearable,” he said. “only NNPC stations are selling at the government-approved pump price at the moment.”

Are The High Prices Evidence Of A Move Towards Deregulation?

Sign up to the Connect Nigeria daily newsletter
Mr Nwosu, who had put out the original Tweet, voiced a suspicion that the rising prices of petrol were a tactic deployed by authorities to ease Nigerians into higher price regimes for the product– effectively ending subsidies on petrol.

“This is a plot to increase the pump price tactfully,” he suggested.

This belief has been expressed by many, who recall that the government had until recently been fiddling with the idea of ending the existing subsidy on PMS.

Government officials had said last year that the subsidy payments would be halted in 2022. However, Zainab Ahmed, Nigeria’s Minister of Finance, announced a reversal of this plan in January, stating that the timing originally given for the removal of the subsidy on PMS was inconvenient.

The higher (and differing) petrol prices aren’t exactly new either. They have been a feature of previous periods of petrol scarcity. Observers have attributed this to the workings of market forces: prices have shot up because the supply of petrol hasn’t met the demand for it.

So, why is petrol in short supply? What’s Actually Going On?

Early in February, news broke that about 100 million litres of petrol imported into Nigeria for local use was defective. Authorities said that the stock contained methanol quantities that exceeded the country’s safety specifications.

What followed was a rush to withdraw the problematic product from circulation. The move left the public with less PMS than was sufficient and triggered a scarcity of the product. In the weeks that have followed, petrol marketers have found it difficult to source it. With supply lagging far behind demand in many parts of Nigeria, the stage was set for a hike in petrol prices.

The government has tried to tackle the situation. It’s announced that about 1 billion litres of PMS are being distributed across the country and that an additional 2.3 billion litres would be made available soon.

Still, the shortage persists– at least in some cities.

As with previous events of this nature, the present under-supply of petrol will almost certainly end at some point. And when it does, it will be up to the government to learn vital lessons from it and ensure that it doesn’t repeat.

Featured Image Source: BrandAfriq
Got a suggestion? Contact us:

You might also like:
This article was first published on 5th March 2022


Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

Comments (392)

392 thoughts on “Rising Fuel Prices In Nigeria: Has Deregulation Begun?”

Leave a Reply

Your email address will not be published. Required fields are marked *