Fuel queues have resurfaced across Lagos following a petrol price hike by the Nigerian National Petroleum Company Ltd. (NNPC) and other fuel marketers.
According to the News Agency of Nigeria (NAN), many filling stations along Ikorodu Road, Ikeja, and Bariga have temporarily shut down due to the price increase. NAN reports that the pump price at NNPC stations has risen to N998 per litre, with other marketers charging even higher rates.
For example, Northwest filling stations are selling petrol at N1,000, Hyden Petroleum at N1,100, and NIPCO at N1,050 per litre.
This marks the third petrol price increase in two months, following the commencement of fuel supplies from the Dangote Oil Refinery on the outskirts of Lagos.
NNPC Ltd. raised the petrol price from N855 to N998 per litre in Lagos, with prices in the North-East reaching N1,003.
On September 3, the price had previously jumped from N568 per litre in Lagos and N617 in other regions to a minimum of N855.
Dr. Ayodele Oni, an energy lawyer and partner at Bloomfield Law Practice, suggested that the government could stimulate competition by encouraging the development of modular refineries and revamping national refining facilities.
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He noted that increased competition among refiners could potentially lead to more favorable prices for consumers.
Oni also recommended that the government take steps to stabilize exchange rate fluctuations.
In the short term, he advised partially defending the Naira with foreign exchange reserves, while in the long term, he called for policies that promote exports and foreign direct investment to boost dollar inflows.
Diversifying the economy into manufacturing and agriculture would also help reduce import costs, according to Oni.
He further proposed that Nigeria explore alternative fuel sources such as Compressed Natural Gas (CNG) and advised citizens to take advantage of government incentives for converting vehicles to CNG.
Oni urged the government to introduce mass transit systems to mitigate the impact of fuel price volatility on the public.
He explained that Nigeria is now operating under a deregulated fuel market, where prices are determined by market forces such as exchange rates.
He attributed the recent price hikes primarily to the rising dollar exchange rate against the Naira, given that the petroleum sector operates in a dollar-dependent market.
Oni expressed optimism that the crude-for-Naira agreement between NNPC and the Dangote Refinery could help stabilize the Naira and ease pricing pressures.
(Vanguard)
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