BY Wasilat Azeez
“Motorists and passengers have expressed outrage at the government’s decision to increase the price of petrol.” This is the news from Kenya… and Nigeria if you consider Friday’s incident.
The Petroleum Products Pricing Regulatory Agency (PPPRA) published a petrol pricing template on its website on Thursday, March 11, where it pegged the recommended retail price at between N209.61 and N212.61 per litre.
The ex-depot price, which is the rate marketers get the product, was fixed at N206.42.
The federal government and Nigerian National Petroleum Corporation (NNPC), however, assured Nigerians that there would be no increase in the price of petrol in March.
The PPPRA subsequently deleted the template from its website.
Checks by TheCable showed that the increase (or anticipated increase) in the price of petrol is not peculiar to Nigeria.
However, the price of petrol has remained unchanged in Nigeria at N162 per litre ($0.33) since December.
In three simple words — crude oil prices.
In the US, the price of crude oil forms 52 percent of the final price of the refined petrol
In March 2020, Nigeria adopted a price modulation policy where international crude oil prices and associated landing costs in Nigeria are used to determine the retail price of petrol.
During the thick of the pandemic in 2020, crude oil prices crashed to as low as $26 per barrel resulting in a drop in petrol price in Nigeria.
At the time, the petrol price was reduced from N145 to N125 per litre as crude oil was sold for about $26 per barrel and reviewed downwards to N123.50
The N162 pump price was set when crude oil traded just above $43 per barrel.
Goldman Sachs Commodities Research recently projected that the price of Brent crude will hit $75 by the second quarter and $80 by the third quarter of 2021.
If this happens, an increase in the price of petrol is almost inevitable — except the government resumes subsidy payment.
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