Nigerians Grappling With Soaring Fuel Prices


When petrol prices skyrocketed to N600 in many Nigerian cities, the new trend was converting petrol generators to run on cooking gas. However, in Nigeria, life moves fast, and the commodity could reach N18,000 by December.

Nigerians are feeling the harsh consequences of poorly planned government policies and bold decisions without careful consequence management.

President Bola Tinubu, while ringing the NASDAQ closing bell, highlighted his reforms in removing subsidies and unifying official rates. Still, these decisions have plunged millions into poverty due to a poorly managed intervention program and a lack of concrete plans to increase the dollar supply.

After fuel subsidy removal, Nigerians turned to gas as an alternative, with cooking gas prices averaging N6,000 for 12.5kg. Oil marketers pledged N10 billion in investments to introduce CNG-powered public transit buses.

However, it took three months for the government to approve the Presidential Compressed Natural Gas Initiative (PCNGI), which aims to revolutionize transportation, create jobs, and promote local manufacturing.

Now, the average cooking gas price is soaring. Olatunbosun Oladapo, President of the Nigerian Association of Liquefied Petroleum Gas Marketers, warns that it could reach N18 million per metric tonne by December, potentially raising the price of a 12.5kg cylinder to N18,000.

The surge in diesel prices, nearing N1,000 per liter, is affecting SMEs and may lead to higher costs in food, transport, and services.

Despite efforts to control petrol prices, concerns about a subsidy resurgence have arisen, fueled by the FAAC report showing over N169 billion spent on subsidies in August.

While President Tinubu's reforms initially received praise from organizations like the World Bank and IMF, market conditions are cooling down. Nigeria's reclassification from Frontier to Unclassified Market Status by FTSE Russell has hit the stock market.

The inability of international investors to repatriate capital at a favorable exchange rate has further strained the situation. This has led to a weaker parallel-market rate for the Naira, about 29 percent weaker than the official exchange rate, highlighting the challenges faced after currency reforms were announced in June.

Post a Comment

Please Select Embedded Mode To Show The Comment System.*

Previous Post Next Post