How Petrol Subsidy Removal in Nigeria has impacted prices across West Africa
Petrol prices across neigbouring West African countries have risen since Nigeria announces the removal of subsidies on petrol, surging over 40% across markets surveyed. This is projected to cause much poverty among the people in the region and push an estimated 3.1 million people in Nigeria into poverty!
Globalpetrolprices, an energy price data and fuel price forecasts think-tank revealed that countries like Cameroon, Togo, Benin, and Guinea among others are facing the brunt of this development.
The price difference between the average price in Nigeria and Guinea is less than N268 and about N433 per litre for some other West African neighbours, indicating that Nigeria’s subsidy removal has roiled the trade in illicit petrol across the sub region.
“The surge seen in prices of petrol around border countries like Benin republic, Chad and Niger is a testament to the fact that Nigeria has for years subsidized petrol prices across these countries,” said Kelvin Emmanuel, an energy expert and co-founder/CEO at Diary Hills.
Analysis shows that removing subsidy on petrol has made smuggling petrol from Nigeria less lucrative as the black market price seemed to be converging with the retail prices at official stations.
In a viral video that trended on various social media platforms, some motorcycle riders in Cameroun were seen wailing and expressing their displeasure with the move by President Bola Tinubu.
According to Billy Gills-Harry, president of the petroleum Retails Outlet Owners Association of Nigeria, the removal of petrol subsidy in Nigeria has had an impact on petrol prices across West Africa.
Gills-Harry suggests that neighbouring countries experience price fluctuations due to supply disruptions and high demand. Additionally, he mentions that the purchasing power of countries involved in smuggling petrol from Nigeria has been affected by subsidy removal.
The volume of petrol smuggled out of Nigeria is not well-documented. The sole supplier, Nigeria’s state-controlled oil company NNPC, stated earlier this month that 66 million litres of petrol left its depots everyday but was unable to estimate how much was consumed domestically, even though the company acknowledged that smuggling was rife.
Nigeria’s entire daily energy usage is estimated to be less than 40 million litres by independent energy experts and Nigeria’s Dangote Petroleum Refinery, which plans to begin manufacturing petrol in early August will ease the country’s ongoing petrol shortages.
Some few days ago, Vice President Kashim Shettima said that Nigeria’s daily petrol consumption has dropped to 41 million litres from 67 million litres, following the removal of subsidy on the product by President Bola Tinubu.
According to him, the whole subsidy regime was opague and ridden with a lot of inconsistencies.