From N175 to N1,030: How PMS prices skyrocketed under Tinubu as petroleum minister

Despite promising to bring down the price of petrol during his campaign, President Bola Tinubu has repeatedly increased petrol price by about 488 per cent – from N175 in May 2023 to N1,030 in October 2024 – inflicting more pains on the already impoverished Nigerians, reports DARE OLAWIN.

The first assignment performed by President Bola Tinubu when he assumed office on May 29, 2023, was the removal of the petrol subsidy. Immediately after he took the oath of office, Tinubu, like a man in a hurry, quickly announced, “The fuel subsidy is gone.”

Immediately after the pronouncement, the country’s economic situation took a downward dive, changing for the worse. Filling stations, including the ones owned by the Nigerian National Petroleum Company Limited, raised the pump price of petrol to above N500 per litre. Some Nigerians, who had hoped that the new administration would turn around the situation positively began to feel uneasy; though they were persuaded by the President, who stated that there would be gain after pain.

Remarkably, Tinubu hiked the fuel price without recourse to the promise he made in Abeokuta during his campaign that he would bring down the price of petrol.
While campaigning, Tinubu and the other major contestants vowed to remove fuel subsidies if elected into office. However, when he was in Abeokuta in Ogun State, the then-candidate of the All Progressives Congress appeared to have backtracked when he promised to bring down fuel prices. The former Lagos State Governor had accused the Muhammadu Buhari administration of causing artificial fuel scarcity to make him lose the election.

Addressing APC supporters in Yoruba, Tinubu said, “Won ni epo ma won, o ma di N200, o ma di N500. E lo fokanbale, a maa gbe wale” meaning“They said there would be a fuel price hike; that it will rise to N200, to N500. Put your mind at rest; we will bring it down.”

This elicited jubilations from the crowd who saw the Lagos politician as a messiah. However, the reverse has been the case since he’s been at the helm of affairs in the last 16 months.
To the average Nigerian, petrol means more than what it is in other countries. The country’s economy depends almost solely on fuel. Both the rich and the poor need petrol for one activity or the other, it may be for vehicles or to run engines used for commercial services.

Also, in a country where over 85 million people have no access to electricity, petrol has always been the hope of the people, both the rich and the poor alike, to avoid darkness. Nigeria is also one of the largest markets for power generators in the world.

With the rising cost of petrol, access to electricity has been reduced, especially in rural communities.

Similarly, those who don’t have reasons to buy petrol feel the impact of the price hike whenever they try to use public transport because commercial drivers have jerked up the cost of transportation. With the high cost of transportation, the prices of items in the markets have continued to rise daily.

The masses’ problem was compounded about two weeks after Tinubu’s inauguration when he also floated the naira.

In June, the Central Bank of Nigeria directed Deposit Money Banks to remove the rate cap on the naira at the Investors and Exporters Window of the foreign exchange market, to allow for a free float of the national currency against the dollar and other global currencies.

Following this development, the naira depreciated from around N400 per dollar to over N700/dollar during trading on the I&E window on June 14, 2023. Today, the naira has further lost its value, trading at over N1,600 as of Wednesday.
This means the price of petrol would continue to rise because the product is priced in dollars.

When the President devalued the exchange rate, the cost of petrol rose again. However, the NNPC quickly introduced subsidy payment through the back door. While the landing cost of petrol was around N1,200, the NNPC sold at half the price based on the promise of the Federal Government to pay the shortfall or what was tagged “under-recovery.”

For close to a year, the NNPC sold the product at about N600/litre. The oil firm kept denying claims that it was paying subsidies.

Recently, however, the energy firm admitted to selling below the cost price.

The Chief Financial Officer of the company, Umar Ajiya, stated, “In the last eight to nine years, NNPC has not paid anybody a dime as subsidy; no one has been paid a kobo by NNPC in the name of subsidy. No marketer has received any money from us by way of subsidy.

“What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price. So, the difference between the landing price and that half price is a shortfall.

“And the deal is between the federation and NNPC to reconcile. Sometimes, they give us money, so there is no money exchanging hands with any marketer in the name of subsidy,” he said.
Following reports that the NNPC was indebted to a number of its PMS importers, the company hastily denied it, telling The PUNCH that there was nothing like that.

“NNPC Ltd does not owe the sum of $6.8bn to any international trader(s). In the oil trading business, transactions are carried out on credit, so it is normal to have outstanding amounts at certain times,” the company’s spokesperson, Olufemi Soneye, stated.
A few weeks later, the national oil company admitted that it owed its suppliers. It stated this when there seemed to be no way out of the lingering fuel queues in filling stations.

“NNPC Ltd has acknowledged recent reports in national newspapers regarding the company’s significant debt to petrol suppliers. This financial strain has placed considerable pressure on the company and it poses a threat to the sustainability of fuel supply,” Soneye said in another statement in September.

Immediately after Soneye’s comment, NNPC raised the PMS pump price from N600 to N855/litre or more, depending on the location. This significant hike coincided with the unveiling of the Dangote refinery’s PMS, fuelling concerns about what the future held for Nigerians, with hopes that the private refinery would crash the price of the product.

As the NNPC started lifting PMS from the refinery in September, it announced another price increase. Soneye hinted that a litre of the product was purchased at the rate of N898. It also announced that it would sell petrol between N950 and N1,119.

Soneye explained that the price might go for as high as N1,019/litre in Borno State and N999.22 in Abuja, Sokoto, Kano, and others.
In Oyo, Rivers and other areas in the South, it would be N960/litre and N950 in Lagos and its environs. Since the announcement, the NNPC retained the price of petrol below N900.

However, without direct communication, the state-owned company increased the price to N1,030 on Wednesday, throwing the masses into confusion.

There were reports that the NNPC was planning to quit as the sole off-taker of Dangote PMS to allow marketers to buy directly from the refinery.

At the moment, the two parties are not talking to Nigerians. The technical committee set up to organise the naira-crude sale to local refineries is also not communicating, even as long queues resurfaced in filling stations across the country.

Public outcry

Since the Tinubu government came on board, there has been one outcry or the other from the masses. On several occasions, labour unions and youths took to the streets to protest economic hardships.

In August and October, Nigerian youths staged protests demanding an end to bad governance. One of their demands is that the President should return fuel subsidies to reduce economic challenges.
Following the latest hike, the Nigeria Labour Congress and the Organised Private Sector called for the immediate reversal of the hike in petrol prices, accusing the government of only focusing on fuel price increments.

The NLC, in a statement signed by its president, Joe Ajaero, described the decision of the NNPCL as an aberration.

Ajaero stated, “Even following the logic of market forces, we find it an aberration that a private company (NNPCL) is the one fixing prices and projecting itself as a hegemonic monopoly. We challenge the government to go to the drawing board and present us with a blueprint for inclusive economic growth and national development instead of this spasmodic holism and palliative policy.

“It needs no stating the fact that the latest wave of increase has grossly altered the calculations of Nigerians once again at a time they were reluctantly coming to terms with their new realities.

“It will further deepen poverty as production capacities dip, more jobs lost with multidimensional negative effects. In light of this, we urge the government to immediately reverse this rate hike as previous increases did not produce any good results. People only got poorer.”

Meanwhile, experts have blamed the devaluation of the naira for the high price of petrol. To some, the President should not have floated the naira at the same time it removed fuel subsidies.

In an interview, the spokesperson of the Crude Oil Refinery Owners Association of Nigeria, Eche Idoko, advised the government to sell crude to local refineries at N1,000 to a dollar.
In conclusion, Tinubu’s administration has reneged on its promise to bring down petrol prices, instead implementing a series of crippling hikes that have plunged Nigerians into deeper economic hardship. The removal of fuel subsidies and the floating of the naira has created a perfect storm, resulting in skyrocketing prices and widespread suffering.

The data is stark: Petrol prices have risen by 488 per cent in just over a year from N175 to N1,030. The naira has lost significant value, trading at over N1,600 to the dollar. Nigerians are bearing the brunt, with increased transportation costs, higher market prices, and reduced access to electricity.

The government must take responsibility for its policies and engage with stakeholders to find sustainable solutions. It is believed that reversing the price hike, exploring alternative energy sources, and supporting local refineries could alleviate the crisis.

As Nigerians continue to struggle, one thing is clear: the President’s broken promise has become a harsh reality, and the nation demands accountability and urgent action.