By Adewale Sanyaolu

The unending fuel scarcity across major parts of the country has taken a negative effect on Nigerians and brought the economy to it kneels.

Indeed, the price of Premium Motor Spirit (PMS), popularly called petrol has risen above the Federal Government’s projected N410 per litre in a post fuel subsidy regime with indications that the fuel subsidy regime is collapsing as premium motor spirit (PMS) now sells far above the regulated prices across the country.

Findings by Saturday Sun reveal that some filling stations in some parts of the country were selling at N500 per litre

This was even as commuters have resorted to keeping vigil at filling station in a bid to get the product.

Findings by Daily Sun reveal that commuters in desperate search of petrol now keep vigil at the NNPC retail outlet on Awolowo road, Ikoyi and Total filling station on Mobolaji Bank Anthony Way, Ikeja

The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mr. Mele Kyari, had last year said that without fuel subsidy, petrol would sell for N410 per litre.

But despite petrol still being subsidized, the product  hit N500 per litre in Benin City, the Edo State Capital.

Also in Ibadan, the Oyo State capital, petrol sold for N350 to N400 respectively in some select filling stations.

Taking to Facebook to express his anger and frustration, a resident in Benin City, Mr.Yinka Adedipe, said  he bought fuel at N500 per litre at Conoil filling station on Airport Road by Reservation Road junction. Another commuter who also took his anguish to Facebook and identified himself as Samuel Asein, said he bought petrol at N600 per litre at  Samadeh filling station in Benin as well.

Corroborating the claims of Adedipe and Asein, another social media user ,Bisi Olaniyi, said most filling stations , especially those operated by major marketers on Ekenwan road, Benin were selling at N510 per litre

The hike in fuel price may not be unconnected with the inability of the Federal Government to deregulate the downstream petroleum industry which may have forced the industry to react to current  market reality.

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National Operations Controller, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mike Oastuyi, said despite the fact that the current price of petrol at over N500 per litre in some locations   was higher than the post-subsidy petrol price of N410 per litre, President Muhammadu Buhari, has made his plans known not to remove subsidy at this time.

He said no Government during an election would be bold enough to take such decision at this critical time.

Though, Osatuyi maintained that the continous payment of subsidy running into several trillions of naira was longer sustainable in the face of current economic reality.

He said the most logical thing for Government to do is to remove subsidy in order to free up funds for some other needs which included infrastructure among others. A recent statement by the Major Oil Marketers Association of Nigeria (MOMAN),  attributed the lingering fuel scarcity in the country to high costs of vessels and inadequate trucks to deliver petroleum products from depots to filling stations across Nigeria. The marketers explained that these high logistics and exchange rate costs continue to put pressure on their operations with ripple effects on the pump price.

 “The major cause is the shortage and high (US Dollar) costs of daughter’s vessels for ferrying product from mother vessels to depots along the coast,” it said.

Next is the inadequate number of trucks to meet the demand to deliver products from depots to filling stations nationwide.”

Energy analyst, Kayode Oluwadare,  maintains that Nigerians should not equate these price increases with the reality that awaits when fuel subsidy is eventually removed. 

According to him, the same challenges like forex issues, bad roads, marketers, and private depot owners’ disagreements, which have made Nigerians struggle with fuel scarcity for years, will still be present even after fuel subsidy is removed. He said: 

“Fuel subsidy removal will push up inflation. How will the government provide solutions to the impact the removal will have on the welfare of Nigerians and all the sectors of the economy including the capital market? The effects of subsidy removal will be multifaceted.  

 “If no sound palliative measures can come from the government that will remove subsidy, then it is pointless. I noticed that presidential candidates for the 2023 elections have been waxing lyrical about fuel subsidy removal but no one has presented a framework on how to do this without hurting the economic welfare of Nigerians.”  

According to Oluwadare, there is no way to tell what the price of PMS would be if the fuel subsidy is eventually removed. He said it could go beyond N500 to about N900 or even N1000 per litre. He further cautioned that since Nigeria is still lacking refining capacity, fuel prices will be determined by the ongoing Russia-Ukraine war as well as forex challenges and even the price cap on Russian oil and gas supplies which will affect international pricing. 

Oluwadare advocates that the fuel subsidy removal should be done in phases and conducted by an independent committee, that will also be charged with evaluating the impact of each phase, so Nigerians who are already battling with a 21.47 per cent inflation rate, can cope better with the removal.