Experts assure petrol price aligns with diesel price to mute inflation
By Jeph Ajobaju, Chief Copy Editor
Industry players believe fuel pump price at N190 per litre will not push up inflation, because the N25 increase is marginal and the higher price of diesel already at N800 per litre will absorb the inflationary impact of the new cost of petrol.
Officials of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and oil marketers last week agreed to raise fuel price to between N170 and N190 per litre. It increased supply and eliminated fuel queues.
The deal increased pump price by N10 per litre above the historical official price of between N162 and N165 per litre. Fuel now sells at between N170 and N190 at most filling stations.
The price increase came after months of fuel scarcity and price hike with the multiplier effect of higher transport costs across the country.
Oil marketers had argued it was no longer sustainable to distribute the product at the official price of between N162 and N165 price per litre. They insisted only an increase in pump price would fix the supply chain chaos.
Analysts at the Lagos Chamber of Commerce and Industry (LCCI) and the Centre for the Promotion of Private Enterprise (CPPE) said the soaring cost of diesel may accelerate inflation but the new price of petrol may not be immediately felt.
CPPE Chief Executive Officer Muda Yusuf described the deal between the government and markets to raise pump price as a necessary compromise that would prevent a complete collapse of the supply chain.
He said the new pump price will “not necessarily” stoke the prices of goods and services “because, before now, the disruption that had been created by the inability of the marketers to distribute at N165 had already pushed the price above N200.
“Outside Lagos and Abuja, I can tell you that people are buying fuel for N190, N200 plus. If you compare that to the N180 that is now the benchmark, people are still better off.
“In terms of the impact on price, I don’t see any considerable adverse effect that this will have compared to when you allow the system to collapse completely.”
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Diesel price offsets inflationary pressure
LCCI Deputy President Gabriel Idahosa, is also upbeat, telling The PUNCH that inflation already being created by the significant increase in the prices of diesel and kerosene would naturally eclipse the marginal increase in the price of petrol.
“Because the diesel price has gone so high already, the fuel price increase from N165 to N180 may only reflect in some movements in the general public transportation who use petrol for their vehicles, but in terms of any significant impact on inflation, it will not be there.”
