Between December 2018 and December 2023, the average retail cost paid by consumers for Premium Motor Spirit (Petrol) rose by 360.81 per cent, data gathered by RipplesMetics has shown.
In real terms, this means at the end of December 2018, the price for a litre of petrol was N145.80. However, in under six years, the average price rose to N671.86 as of the end of 2023.
The data also showed that the price as of December 2023 is the highest retail price ever recorded. However, this is not unconnected to the removal of fuel subsidy initiated by President Bola Tinubu when he assumed office on May 29, 2023. The move was to cut the cost of subsidizing petrol which was estimated to be N400 billion monthly and over N13 trillion spent in 16 years.
Petrol, commonly called fuel, is used by Nigerians for transportation and electricity. With the National Bureau of Statistics data placing more than 90 per cent of Nigerians employed, and the president saying more than 90 per cent of Nigerians do not have access to stable electricity, this would increase the chances of over 200 million people depending daily on petrol.
However, the data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed that since the removal of fuel subsidies which increased the price of fuel by more than 300 per cent, the consumption of fuel dropped.
In January 2023, the average monthly consumption of fuel was 62.31 million. This rose to N72.39 million in March of the same year. Meanwhile, by May the consumption dropped to 69.54 million and when the policy was enacted, 49,84 million in June 2023.
As of October 2023, NMDPRA said the consumption reduced to 44.3 million litres per day.
Price of fuel in six years
According to NBS, petrol sold for N671.86 as of December 2023. This indicated a 225.85 per cent increase when compared to the value recorded in December 2022 which was N206.19.
On State profile analysis in 2023, Ogun State had the highest average retail price for fuel, at N776.54, Taraba and Adamawa States were next, with N760.00 and N745.71, respectively.
Between December 2018 and December 2021, petrol sold between N146 and N166 per litre. This was despite the global pandemic that closed the economy in 2020 and the country moving into its second recession in 2021 after the initial one in 2016.
The increase in 2023, affected sectors like the inflation rate rising over 28 per cent at the end of 2023, which is the highest figure ever recorded in the country with a food inflation of over 30 per cent. RipplesMetrics has examined the cost of fuel since 1999 by different administrations.
There are, however, speculations that with two refineries coming into action in 2024, Nigeria might begin to see a stable price in fuel with the federal government targeting an oil production rate of 1.78 million barrels per day as proposed in the 2024 fiscal budget.
By James Odunayo
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