Nigeria’s Fuel Price Conundrum: Landing Costs Drop, Pump Prices Surge Amidst Deregulation
The cost of landing Premium Motor Spirit, commonly known as petrol, in Nigeria has decreased significantly over the past three months, dropping by 20.34 per cent to N971.57 per litre. This decline, typically expected to influence lower retail prices, has instead coincided with a sharp increase at the pumps, where prices surged by N443 or 71.79 per cent from N617 per litre in August to N1,060 by early November.
The disparity comes despite adjustments in international market conditions. While the Brent crude benchmark eased to $75.57 per barrel from $80.72 in August, and the landing cost of petrol steadily decreased from N1,219 per litre to N971.57, the retail prices have continued to rise, especially at independent filling stations where rates hover near N1,180 per litre.
Figures released by the Major Energies Marketers Association suggest that a fluctuating exchange rate—now at N1,665.84 to the dollar—combined with deregulation of the sector and persistent inflation, are contributing factors. In August, oil marketers faced a higher exchange rate of N1,611 per dollar and sold petrol at N617, but deregulation has since unshackled the influence of foreign exchange volatility and inflation on pump prices.
The Nigeria Labour Congress (NLC) has voiced strong disapproval, accusing marketers of inflating prices and burdening citizens with unjustifiable costs. In a recent communique, the NLC condemned what it calls “exploitative” pricing, urging both the government and marketers to address citizens’ suffering, exacerbated by policies driving widespread hardship and hunger.
Economists warn that unchecked deregulation, paired with a depreciating currency, threatens to undermine consumer purchasing power, while the NLC’s criticism underscores rising discontent over policies seen as eroding livelihoods. For many Nigerians, these dynamics create an uneasy landscape, where relief from landing cost reductions remains elusive at the pumps.
