Nigerians woke up on the 3rd of September to a new petrol price fixed across filling stations in the country. This is due to the removal of the fuel subsidy.
The new fixed price is as a result of the recent increase of the Premium Motor Spirit (petrol) by Petroleum Products Marketing Company, a subsidiary of the Nigeria National Petroleum Company (NNPC) on Wednesday.
They increased the ex-depot price of the PMS to N151.56 per litre. The marketers further said that the product would be sold at between N158 and N162 per litre.
But NNPC claims to be selling for N145 across their own brand of filling stations.
During my movement between Onipan and Command Ipaja area of Lagos State, I observed that just 24 hours after the order, filling stations had switched their meters to the new higher price.
This is unlike the time when there was a price reduction. The main reason given by filling station owners was that, they still had old products in their reserve and would continue to sell at the old rate until fully dispensed.
But the question now is that, have all of them received new products already? The obvious answer is no. This is where we are firstly our own problem.
Although many have criticized the move by the NNPC, it claimed that the price of petrol will now be dictated by the market forces.
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Is the removal of the fuel subsidy permanent?
Many stakeholders in the industry had called for the removal of the subsidy. The Federal Government claims to have hearkened to the calls. We will wait to see what comes up next.
In 2015, before the election of the present administration, petrol was sold at N87. The Excess Crude Account (ECA) had $2.5bn. This was also the time Nigeria’s external debt was $9.7bn. $1 (USD) was equivalent to N200 and a bag of rice cost N8,500.
Fast forward to 2020: fuel now costs an average of N150. The ECA stands at $72m. The external debt is $27bn. The dollar is now N475 and a bag of rice costs N25,000.
How did we get here? Despite claims that our economy is stable, the poor keep getting poorer. We await plausible explanations from the economists.
