Fatshimetrie: Lagos filling stations crowded due to petrol price hike
A familiar scene has returned to Lagos as queues form outside petrol stations in the city. The hike in petrol prices by the Nigerian National Petroleum Corporation (NNPC) and other distributors has disrupted the routine of motorists.
According to reports from the News Agency of Nigeria (NAN), many filling stations, especially those along the Ikorodu, Ikeja and Bariga axis, have been forced to close temporarily due to the price hike. The pump at the NNPC stations now displays N998 per litre, while other distributors are charging even higher prices.
Petrol stations in the North-West region are now selling petrol at N1,000, Hyden Petroleum at N1,100 and NIPCO at N1,050. This is the third increase in two months, following the start of fuel purchases from the Dangote oil refinery on the outskirts of Lagos.
The NNPC has hiked petrol prices from N855 to N998 per litre in Lagos, and as high as N1,003 in the North-Eastern states. By September 3, the price of petrol had risen from N568 in Lagos, the lowest at that time, and from N617 in other regions, to a low of N855.
Dr Ayodele Oni, an energy lawyer, suggested that government could encourage competition by promoting the establishment of modular refineries and the modernization of existing domestic facilities. He said increased competition among refiners could translate into more favorable prices for consumers.
To stabilize exchange rate fluctuations, Dr Oni recommended that government partially defend the naira with foreign currency in the short term. In the long term, he advocated policies that encourage exports and foreign direct investment to increase foreign exchange earnings.
Dr Oni also advocated the diversification of the economy into manufacturing and agriculture to reduce import costs. He proposed exploring alternative energy sources such as Compressed Natural Gas (CNG) and suggested that citizens take advantage of government incentives to convert vehicles to CNG.
He further urged the government to put in place mass transit systems to mitigate the impact of fuel price fluctuations on the population. Nigeria is now operating in a deregulated regime, where prices are influenced by market forces, including exchange rates.
Dr Oni attributed the recent price hikes largely to the rising exchange rate of the dollar against the naira, as the oil sector operates in a dollarized market. He expressed hope that the oil-for-naira deal between NNPC and Dangote Refinery would help stabilise the naira against the dollar and ease price pressures.
The return of queues at Lagos petrol stations once again underscores the vulnerability of consumers to fluctuations in the oil market and highlights the need for government to adopt long-term measures to ensure stability in the country’s energy sector.