By Daramola Babalola

On the 12th of May, 2016 Nigerians woke up to the detestable reality that they will now have to pay ₦145 per litre for Premium Motor Spirit (PMS), otherwise called petrol representing a 40% increase from the previous pump price, ₦86.50



While some are mobilizing for '#occupyNigeria season 2', labour unions in the country are currently planning to commence an indefinite nationwide strike action that will 'shutdown the economy' on Wednesday in a bid to protest the increase in fuel price.

Following the harsh economic realities Nigeria is currently facing, many Nigerians have labelled the Federal Government as being insensitive to the plight of its citizen by making fuel too expensive for consumption.

But really, how expensive is fuel in Nigeria, compared to other countries? and is the Nigerian government really insensitive? We are about to find out.

At ₦145/Litre, is fuel too expensive in Nigeria?
As surprising as it may seem, Nigeria is ranked 12th as per cheapest price of petrol in 173 countries even with the new ₦145 per litre price according to Globalpetrolprices.com

In Nigeria, fuel now costs ₦145/L and with the current exchange rate that is fluctuating between ₦320-₦360 to a dollar, it means we are paying about $0.44/L

It may however interest you to know that in United States, fuel is sold at the pump price of $0.65/L ( ₦214/L), In South Africa $0.84/L (₦277), In Russia $0.55/L (₦181/L), $0.91/L (₦300/L) in Canada, $0.92 (₦303/L) in Ghana, and it costs $0.93 (₦306/L) in China.

Some will argue that the countries above are not petroleum exporting countries (OPEC) like Nigeria, but what about OPEC member countries like Angola, where PMS is sold at $1/L (about ₦330), In Iraq at $0.64/L (₦211), In Venezuela pump price is $0.60/L (₦198/L) with President Nicolas Maduro calling the approximately ₦198/L pump price 'one of the cheapest in the world'.

Even in the oil rich, United Arab Emirates (UAE) PMS is sold at $0.45/L which is about (₦148/L) which is more expensive than the price in Nigeria.



According to Globalpetrolprices.com In Hong Kong, the pump price is set at $1.85/L (about ₦610/L) making the country the most expensive seller of gasoline in the world.



With the facts and figures above, at ₦145/L fuel is not expensive, it's actually one of the cheapest in the world, but because of the poor living conditions of millions of Nigerians, it appears expensive and thus, many Nigerians struggle to afford it.

That is why the government needs to provide welfare programs, kill that disease called corruption, invest in electricity, education, fix refineries, provide jobs and reduce poverty in the country

Is Nigeria the only country increasing pump price?

Again, the answer is a 'BIG NO'.The excruciating increase in pump price is not even limited to Nigeria alone, major oil rich countries of the world have increased their fuel price this year, some even by over 50%.

See examples below

Saudi Arabia 40% increase
In December 2015, Saudi Arabia increased fuel price in the country by 40%
http://www.aljazeera.com/news/2015/12/saudi-arabia-hikes-petrol-prices-40-pump-151228154350415.html
Oil rich Saudi Arabia, last year announced a record $98bn budget deficit due to 'rock-bottom global petroleum prices'
Like Nigeria, Saudi Arabia suffered a sharp drop in revenues as oil prices have fallen more than 60 percent since mid-2014 to below $40 a barrel.
To address the situation, the Gulf kingdom increased fuel price by 40%

Venezuela increased fuel price in February, 2016
President Nicolas Maduro in February increased fuel price to $0.60 (₦198) as Venezuela's economy was pushed to the brink by the collapse in the oil price, which accounts for about 95% of the country's export revenues.
He said the price over 50% rise was "a necessary measure, a necessary action to balance things, I take responsibility for it."
http://www.bbc.com/news/business-35600921?SThisFB


Fuel price increased in UAE in May, 2016
The oil rich, United Arab Emirates also increased pump price about 2 weeks ago.
Fuel is now sold at $0.45/L in UAE, which is about ₦148/L in Nigerian Naira, ₦3 more than the pump price in Nigeria today.
http://english.alarabiya.net/en/business/energy/2016/04/28/Fuel-prices-in-the-UAE-will-increase-in-May.html

Qatar increased fuel price by 30% in January, 2016
The oil rich country that last increased petrol prices in 2011, also increased pump price in January, 2016 to $0.36 (₦118) which is the 5th cheapest pump price in the world.
http://dohanews.co/qatar-increases-petrol-prices-from-midnight-tonight/


50% increase in pump price in Bahrain in January, 2016
As a result of the unprecedented drop in global oil prices, which has seen the price of oil per barrel decline by over 60%.
The government in Bahrain followed the steps of fellow Gulf Cooperation Council (GCC) member countries the country increased fuel price by 50% in January.
http://bna.bh/portal/en/news/705611

I could go on and on, to give more examples of oil rich countries like Nigeria that have increased pump price in 2016, Nigerians need to understand that this is not a Nigerian, Kachikwu, APC or PDP problem, this is a global problem we are dealing with affecting even the oil rich countries of the world.


We need to stop seeing the Federal government as insensitive, wicked, heartless, unfeeling, inconsiderate, thoughtless and hard-hearted for increasing the pump price to ₦145/L. We need to temporary sacrifice for the greater good, with the hope that as promised we will be better off in the long term.

To cushion the current challenges, the Federal Government must also sincerely provide social provisions for millions of poor Nigerians who will suffer from the fuel hike. Some of the oil rich countries listed above have increased fuel price this year, but due to the several welfare packages provided, the citizens can ease through this rough patch.

I am glad about the N500 billion social intervention programmes provided in the 2016 budget, which includes jobs, social safety allowance for the most vulnerable people, free schooling for students, soft loan to traders, investment in infrastructure etc. Hopefully Buhari's 'anti-corruption' centered government can channel the funds with 100% sincerity and accountability.



But why did the fuel price have to increase?

For that barber down the street who relies on petrol most times to power his small generator to keep his business running, it will be difficult for him to understand how the fuel price increase will benefit him in the long run. Infact, he will most likely rant everyday about the hardship the government is causing him.

I'm sure many have wondered why a country like Nigeria, blessed with oil suffer for it? But unfortunately, Crude oil price is an internationally traded commodity , the prices are not set by the countries that produce it. Neither do oil producing countries get a discount in the international market for producing this product.



While many think the current increase in fuel price is about removal of fuel subsidy, this notion is totally wrong because it was brought about by the non-availability of foreign exchange to import petroleum products. infact, there is no provision for subsidy in the 2016 budget according to the Vice President, Yemi Osinbajo.

Oil is selling at below 40 dollars and the currency (dollar) needed to purchase the refined petrol is no longer available, that is just simply the problem here.

Oil and gas make up more than 90 percent of exports in Nigeria, providing the critical source of Nigeria’s foreign exchange.

It’s that simple; a collapse in oil prices could lead to the same in Nigeria’s foreign exchange which is crucial to support consumption of imports. Foreign exchange rates also influence capital flows- investment funds that move into and out of a country. If oil prices continue to drop it would have an adverse effect on the country’s currency value, making it less attractive to foreign investors.

Since our local consumption of fuel is almost entirely imported. The NNPC exchanges crude from its joint venture share to provide about 50% of local fuel consumption. The remaining 50% is imported by major and independent marketers.

However marketers have drastically reduced their importation for several months due to a scarcity of FOREX, thus the need for them to source independent of CBN to be able to meet the nation’s demand arose.

Now any Nigerian entity is free to import the product, subject to existing quality specifications and other guidelines issued by Regulatory Agencies.

All oil marketers will be allowed to import PMS on the basis of FOREX procured from secondary sources.

It is expected that this new policy will lead to improved supply and competition and eventually drive down pump prices.

In addition, this will also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector.


The difference between Jonathan's attempt to increase fuel price in 2012 and this? - And why the anti-₦145/L protests will fail
Former President Goodluck Jonathan ran into trouble after he removed fuel subsidy on New Year’s Day in 2012.



This took fuel price from ₦65 to ₦141 at filling stations. This led to massive protests by civil-rights groups, labour unions, and Nigerians generally. APC, the opposition party at that time, took political advantage of the situation by identifying with the suffering and criticizing the Jonathan administration for removing subsidy.

Four years later President Buhari officially removes fuel subsidy. Millions of Nigerians are angry. Nigerians are understandably accusing the present administration of cowardice, deception, and hypocrisy, but how true is this?

How much was oil price in 2011? Oil price was $113 per barrel. Today, oil price is just about $40 per barrel after going below $30 early this year.

And the exchange rate? Under Goodluck Jonathan’s leadership, the exchange rate was $1 to N162. Today, exchange rate is officially N199 to a dollar; N320-N360 in the parallel market.

And foreign reserves? Nigeria’s foreign reserves stood at $35billion in January 2012 and $29.61billion as at 28 May 2015, the eve of hand over to President Buhari. Today, foreign reserve is $27.1 billion, amid myriad of restrictive measures to stem the steady slide in the economy’s external sector.

Under the previous administration, Nigeria was enjoying an economic-growth rate of 6% averagely. Thanks to Foreign Direct Investment (FDI) riding on the back of a devalued Naira. President Jonathan also, largely, had the right economic mix. But corruption and terrorism were two of its greatest challenges. There were allegations of massive corruption, particularly what was reported to be a fuel-subsidy scam right under Goodluck Jonathan’s nose.

Rather than tackle these allegations by investigating and prosecuting those involved in the scam, President Jonathan decided to remove subsidy as the solution to the problem. The administration claimed removing fuel subsidy would free up funds for capital projects. But Nigerians had little or no trust in the administration. The administration was incompetent and corrupt. How can it be trusted to save for the future? This was a fundamental issue. So ‪#‎OccupyNigeria‬ shot down Nigeria’s economy in January 2012, not simply because Goodluck Jonathan increased fuel price but mainly because millions of Nigerians did not trust the administration with the money it claimed it would “save” for the future.



Today there are strong reasons to believe that if fuel-subsidy removal had been allowed in 2012, most of it would have ended up in private bank accounts.

Under the Buhari administration, though partly due to some of its own reactive and over-restrictive economic policies, the Nigerian economy is sick. There is scarcity of foreign exchange. Oil marketers are finding it extremely difficult to import petroleum products into the country. FDI has nose-dived. The low international-oil price meant there was no need for it.

Now that fuel prices have increased internationally, we expected the government to subsidize to alleviate people’s suffering. The Buhari administration says ‘No. We don’t have enough foreign exchange to do so.” Oil marketers are having difficulties opening letters of credit to import petroleum products. The result is that NNPC alone has had to supply over 90% of petroleum products since October 2015. This has not always been so.

NNPC used to supply 48% of petroleum products. Since NNPC does not have what it takes to supply so much, there will continue to be fuel scarcity. To tackle the scarcity problem, the government painfully decides to free up the oil-supply system by allowing the international-oil price determine fuel price locally without any fiscal intervention. Oil marketers are now accessing foreign exchange (through secondary sources) to import petroleum products into the country since ₦145 naira per litre provides some reasonable profit margin after supply costs.

Meanwhile, the government is taking measures to block leakages through zero budgeting, Single Treasury Account (TSA), and its Anti-Corruption Agenda. We are now talking about refineries, public and private-owned refineries that will eventually make fuel scarcity a thing of the past.

Nigerians asked Jonathan to work on old refineries and build new ones, given the resources available at the time, and first kill the regime of fuel importation. Subsidy would have died a natural death and the process of privatization would have been smoother. Today, some of the refineries are functional again, which were not in Jonathan’s days. Government-owned outlets sell refined fuel today, at a far cheaper rate. Not the private ones.

As labour go all out on Wednesday to attempt to shutdown Nigeria, my prediction is that they will not even achieve up to 5% of what the 2012 #OccupyNigeria protests achieved, the protest is bound to be a massive failure, because more Nigerians trust the sincerity of Buhari's government unlike his predecessor. And while the ₦145/L price remains a hard pill to swallow, it's still the 12th cheapest price in the world, facts only.

Source: http://www.nigerianeye.com/2016/05/at-145l-price-nigerians-buy-one-of.html

Hogwash!

Zombiesm is a terrible sickness!!!!! Are you telling me so we should be rejoicing right?!!!! Well op I believe that you can't say all these things in many filling stations without being lynched. Don't compare yourselves with others because we are not running the same economy , the level of development is different from each other, the rate of poverty is deeper in nigeria than many countries you posted, the level of joblessness is high in nigeria compare to those countries you posted . Now compare this average nigerian feed on 1dollar per day? 1 dollar can you imagine that? So please don't compare us with any one.

Nice read

So?

This is a wonderful and enlightening writeup/copy and paste , but you should have summarized it or cut some points out , it's too long


That said , soon the wailers and the -5% people will come here and argue blindly , all for the hate for Buhari

Proof is there , Most countries in the world increased price of petrol

proof is there , Removing subsidy means savings and improvement in Nigeria

But watch them flock in and attack the OP , they won't say anything reasonable though , all they have to offer is hate for Buhari

good

Some Nigerians still think we deserve free running fuel tap (like water tap) in each of our houses.

even with the high fuel price in other countries, life is still easier for dem..dey earn way more dan Wat we earn...don't compare Nigeria with dem biko

Ok

OP can u also post the minimum wage of these countries?

Weldone.
So in other words, we should keep quiet and quit complaining.
But that's a no,coz I know very well that d standard of living in the mentioned countries is far better than what it is here,and their leaderships aren't as heartless as our leaders here. there are necessary cushioning mechanisms put in place.

We cannot compare ourselves to this people we are Nigerians and we do not have some basic necessities that citizens in those countries enjoy why can you compare yourselves to them what has the government done for you. Fuel is supposed to be free in Nigeria with no light, no tap water, no primary health care and no rail transport

PETROL PRICE IN SOME AFRICAN
COUNTRIES.
KENYA - N241.03
S/AFRICA - N237.05
GHANA - N211.15
ETHIOPIA - N197.21
TUNISIA - N181.27
EGYPT - N175.3
ANGOLA - N151.39
NIGERIA - N145
ALGERIA - N53.78
LIBYA - N23.9
Source - Dailytrust, Thursday 12/5/2016.
Am
going to Libya to buy fuel so if you have
jerrycans bring it now oh

Foolishness is a curse! OP now go back to the drawing board and rate those countries Minimum wage with our 18,000. Don't know who to blame in your case, your Zombiemsm has no cure again.

Now check the image below and google Non OPEC member minimum wage too...

cc Steadymind

Do you also know that this countries enjoy 24/7 power supply? Compare to our epileptic power here?

What about other infrastructure like Roads, Market, security etc?

Zombie is a disease

reason why we should rather protest for increase in minimum wage rather than protest against increas in the pump price. it is high time we lay to rest, the subsidy issue.

It amazes me to see this kind of analysis. How can you compare the price of PMS in Nigeria to that if other countries? Do we all use the same currency? Is the minimum wage in all countries the same?

Your Figures are wrong.

Where is your source?

No need to conjure up figures, the writeup has enough sources and links to show i did not dream up the numbers. Petrol in Nigeria is the 12th Cheapest in the world.

great664:
Foolishness is a curse! OP now go back to the drawing board and rate those countries Minimum wage with our 18,000. Don't know who to blame in your case, your Zombiemsm has no cure again.

Now check the image below and google Non OPEC member minimum wage too...

cc Steadymind

There is a very complex thing called currency conversion that allows you to compare prices even though we dont use the same currency.
you should try learning it.

naija247:
It amazes me to see this kind of analysis. How can you compare the price of PMS in Nigeria to that if other countries? Do we all use the same currency? Is the minimum wage in all countries the same?

jcross19:
Zombiesm is a terrible sickness!!!!! Am telling you so we should be rejoicing right?!!!! Well op I believe that you can't say all these many filling stations without being lynched. Don't compare yourselves with others because we are not running the same economy , the level of development is different from each other, the rate of poverty is deeper in nigeria than many countries you posted, the level of joblessness is high in nigeria compare to those countries you posted . Now compare this average nigerian feed on 1dollar per day? 1 dollar can you imagine that? So please don't compare us with any one.

You took the word out of my mouth. Poverty is deeper in this country may God help the populace.

boriswole:
Nice read

You might be suffering from zombielaria

jcross19:
Zombiesm is a terrible sickness!!!!! Am telling you so we should be rejoicing right?!!!! Well op I believe that you can't say all these many filling stations without being lynched. Don't compare yourselves with others because we are not running the same economy , the level of development is different from each other, the rate of poverty is deeper in nigeria than many countries you posted, the level of joblessness is high in nigeria compare to those countries you posted . Now compare this average nigerian feed on 1dollar per day? 1 dollar can you ima?gine that? So please don't compare us with any one.

you are calling the OP a zombie because he gave you information I can swear you didn't have before. Wailing will earn you nothing just a few likes but the fact of the matter is Jonathan /NOI cannot do better than what is being done to take Nigerians out of our misery. The budget, the anti corruption fight, terrorism fight, is it not enough to give the government a chance? to save a sinking ship, the first step is to stop the ship from sinking further.

Or does Buhari look like a président that is sitting and folding his hands while you suffer?

Has the OP asked himself if these mentioned countries use generators to generate power...remember OP nigerians come in contact wih gasoline much like we do water...Our lives in nigeria revolve around pms and other refined products because our country can't give us steady power....

What rubish post is this....

steadymind:
Your Figures are wrong.

Where is your source?

No need to conjure up figures, the writeup has enough sources and links to show i did not dream up the numbers. Petrol in Nigeria is the 12th Cheapest in the world.

You misunderstood Sir, no doubt the 12th cheapest, my take is those countries Minimum wage are better to Nigeria and those countries enjoy at least 18-24hrs of light daily....

Trust me if theres 24/7 electricity in Nigeria , no one will complain if PmS is N500/Litre since it will be cars and machines only that will be using it....

You don't expect me to generate light myself, maintain road myself, pay my health care bills , pay me 18,000 Naira and expect me not to complain....

The problem is our leaders are quik to copy what favours them and neglect others....


Please ask the same mofo or help him to compare he minimum wage, Power and other infrastructure...

The writer only wrote for his masters to deceive gullible Nigerians and I am not one of them...its a pity you fall for it.

Somebody should tell that fool DARAMOLA BABALOLA to compare it with minimum wage first.
Steadymind u are in a good position to do it! Blind daft zombies.

Then the conversation should be about minimum wage.

This is a fuel subsidy conversation. The point is to agree that it doesnt make sense to subsidise fuel and that N145 per liter is not outrageous.

I would support the move for an increase in minimum wage only if i thought Nigeria could afford it.

The states cant afford to pay salaries at N18,000 and you are talking of minimum wage increase.

Imagine a serious worker who is being owed 6 months salary asking for a wage increment, wouldnt you think he was insane?

great664:


You misunderstood Sir, no doubt the 12th cheapest, my take is those countries Minimum wage are better to Nigeria and those countries enjoy at least 18-24hrs of light daily....

Trust me if theres 24/7 electricity in Nigeria , no one will complain if PmS is N500/Litre since it will be cars and machines only that will be using it....

You don't expect me to generate light myself, maintain road myself, pay my health care bills , pay me 18,000 Naira and expect me not to complain....

The problem is our leaders are quik to copy what favours them and neglect others....


Please ask the same mofo or help him to compare he minimum wage, Power and other infrastructure...

The writer only wrote for his masters to deceive gullible Nigerians and I am not one of them...its a pity you fall for it.

Your Language shows your frustration, but you cant argue with facts.
once we stop bleeding through unprofitable crude swaps and our economy strengthens, maybe we can afford a minimum wage increase.
The truth is that the country cannot afford it.
How will governors who cant pay N18,000 pay N56,000. if you think that makes sense then i will understand your angle is not about making sense, it is about wailing.

lomprico:
Somebody should tell that fool DARAMOLA BABALOLA to compare it with minimum wage first.
Steadymind u are in a good position to do it! Blind daft zombies.

Dont mind the wailer.

boriswole:
Your Language shows your frustration, but you cant argue with facts.
once we stop bleeding through unprofitable crude swaps and our economy strengthens, maybe we can afford a minimum wage increase.
The truth is that the country cannot afford it.
How will governors who cant pay N18,000 pay N56,000. if you think that makes sense then i will understand your angle is not about making sense, it is about wailing.

Which of these countries you compare Nigeria pump price with gives her citizen 18,000 naira as minimum wage.

If you are here and you protested the removal of fuel subsidy in 2012 and now you are looking for ways to convince us that its a good decision because its now taken by buhari the bastard. It shall not be well with you and your families!