The Nigerian National Petroleum Corporation Limited (NNPCL) has raised the pump price of fuel significantly, with the new prices set at N1,030 per litre in Abuja and N998 per litre in Lagos. This marks an increase from the previous prices of N897 and N885, respectively.
Details of the Price Hike
- Observations in Abuja: At an NNPC outlet in Maitama, motorists were seen queuing up amid complaints about the price increase. Another station in Gudu had fuel available, but sales were paused pending adjustments to the pricing meters. An attendant confirmed the new price of N1,030 per litre.
- Lagos Update: In Lagos, motorists faced long queues as the price increased to N998 per litre.
Context of the Increase
This fuel price adjustment comes just a day after reports suggested a potential hike due to the NNPCL’s exit as a middleman in the fuel purchase agreement with the Dangote Refinery. Previously, the NNPCL absorbed a subsidy of N133 per litre to cover the price gap between the refinery’s price and the retail price.
- Deregulation Shift: The NNPCL’s decision reflects a significant shift toward a fully deregulated oil market, where fuel marketers will now negotiate prices directly with the Dangote Refinery under a “willing buyer, willing seller” arrangement. This model is already in place for other deregulated products like diesel and kerosene.
- Impacts on Subsidy System: An official from the NNPCL noted the unsustainable financial burden of the subsidy system, emphasizing that continuing to absorb the cost was not feasible.
This change in pricing and structure is expected to have a considerable impact on fuel access and the overall economy in Nigeria.
