“Fuel Subsidy Is Gone”: Marketer Explains Hiked Fuel Prices After President Tinubu’s Speech
- The reason for the sudden fuel pump price hike on inauguration day has been identified
- Since the inauguration of President Tinubu, fuel prices have skyrocketed across Nigeria
- Fuel queues have returned, and many filling stations are selling the product for as high as N700 per litre
An oil marketer has revealed why the pump price of petrol across Nigeria was hiked immediately after President Bola Tinubu's speech at the inauguration ceremony on Monday, May 29, 2023, at The Eagle Square in Abuja.
It would be recalled that soon after President Tinubu declared fuel subsidy had been removed, Nigerians resumed panic buying the product, leading to most filling stations hiking pump prices to over N500 per litre, depending on the city.
The skyrocketed hike subsequently led to long queues at filling stations and a resultant hike in transportation fares across major cities in Nigeria.
Source: UGC
Fuel price hike as a result of high demand
Speaking with Legit.ng on this week's sudden hike in fuel prices, Jude Awaliabe, a member of the Lagos branch of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said the hike was a result of market economics of demand and supply.
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He said:
We all know how the market works. Once there is high demand, the price must adjust upward and vice versa. What happened on Monday is that some filling stations saw an opportunity to make more money from consumers and took advantage of it.
This, to me, is quite unfair given that the fuel in their stations and depots are the ones that the government had already subsidised.
Awaliabe further stated that even though the Federal Government's intention to remove fuel subsidy for the remaining half of the year was no secret, the government failed to put palliative measures in place to cushion the effect on Nigerians.
He said:
Since last year November, the FG had declared that it was no longer going to continue with fuel subsidy from the beginning of the third quarter of this year. What stops the government from making arrangements for palliative measures before this time?
For decades, the issue of fuel subsidy has been highly debated in many quarters, with insights that the government wastes a considerable part of the country's annual budget enriching oil marketers.
It was shocking to many when the Federal Government had this year revealed that it set aside the sum of N3.36 trillion to spend on fuel subsidy between January and June 2023.
Each of Nigeria's major presidential candidates in the last general elections had declared in their manifestoes and at different forums that they would remove subsidy if they won the election and became president.
Interestingly, Nigeria's neighbour, Ghana, in March 2023, successfully removed fuel subsidy in the country. This follows 10 years of subsidy reforms and regulatory measures to ensure stability across its downstream sector.
Tinubu's "fuel subsidy is gone" declaration seems to have stamped the final decision to get rid of the subsidy, but it remains to be seen how Nigerians will cope in the coming weeks and months.
NNPC adjusts petrol prices across major cities in Nigeria
In related news, Legit.ng reported that the Nigeria National Petroleum Company (NPPC) Limited implemented petrol price adjustments in three major Nigerian cities in response to the removal of the petrol subsidy.
This move aims to bring transparency to the situation following the elimination of the contentious subsidy program, which previously consumed approximately $10 billion annually.
As per reports, the impact of this change is evident in Lagos, where the NNPC's retail outlets now sell a litre of petrol for N488, while in Port Harcourt, the capital of Rivers State, the price stands at N511 per litre.
Being the exclusive provider of petrol in Nigeria, the NNPC's adjustment is expected to prompt other marketers to follow suit and revise their prices accordingly.
Source: Legit.ng
