More Woes For Nigerians As PPPRA Increases Fuel Price

The government has proposed an increase in fuel price that will now see Nigerians pay between N140.80 and N143.80 kobo per litre. The new fuel price was initiated by the Petroleum Product Pricing Regulatory Agency (PPPRA), the price regulator of the Nigerian oil industry.

The new price means fuel will no longer be sold at the previous price of N121.50 kobo. In a statement signed by the Abdulkadir Saidu, PPPRA executive secretary, and seen by AllNews, the regulator said, “Please recall the provision for the establishment of a monthly price band within which petroleum marketers are expected to sell PMS at the retail stations, based on the existing price regime”.

“After a review of the prevailing market fundamentals in the month of June and considering marketers’ realistic operating costs, as much as practicable, we wish to advise a new PMS pump price band of N140.80 – N143.80/litre for the month of July 2020.” The statement reads.

The increase comes a month after a downward review of the ex-depot price to N108, while the retail price was adjusted to N121.50 in June. Prior to this period, the fuel price was N125 per litre, but it was dropped to N123.50 kobo in April this year.

The PPPRA statement further explained that the price increase will cover new ex-depot price, including the statutory charges of bridging fund, marine transport average, national transport allowance (NTA) and the administrative charge.

Increase Coming At The Wrong Time

The increase in fuel price is coming at a period purchasing power is dropping in Nigeria due to job loss and salary cut caused by the coronavirus pandemic. Over 21 million jobs have been affected in Nigeria due to the negative impact of the virus outbreak, small businesses and low-income households are among the most affected.

So an increase in fuel price will only compound the situation of small businesses and low-income households. Fuel is vital to Nigerians as the country depends largely on alternative power supply like the generator - only a few are using solar, and electricity isn't stable within the country.

Fuel used to power businesses drives up operating cost and it is the major constraint affecting the ease of doing business in Nigeria. Although, the increase in pump price is for the government to increase its dwindling revenue, but that will be at the detriment of the citizens whose purchasing power have dropped.

The increase also follows the warning made by the International Monetary Fund (IMF) that Nigeria should resist implementing unfriendly policies that will increase the burden on small businesses and households within the country. IMF had stated that the right policies the government needs to initiate now is affordable and supportive policies - the increase in fuel price shows the government doesn't intend to go that route.