When Finance Minister Taiwo Oyedele announced a ₦1,350-per-litre petrol ceiling on 8 October, many Nigerians heard a pump price. It isn’t one.
What the ceiling covers
The figure is a proposed cap on the ex-gantry or landing cost of petrol. It is meant to stop sharp swings in crude prices or the exchange rate from immediately raising what petrol costs. It describes what refiners and importers charge, not what motorists pay at the station. channelstv
The government was still negotiating the ceiling and said it would be reviewed monthly, with the figures published. Officials insist it is neither a subsidy nor price control. Where costs rise above the ceiling, refiners and importers would carry the shortfall and recover it later, once crude prices or the exchange rate allow. channelstvnigerianeye
From depot to pump
Other costs are added between the depot and the pump. Retail prices depend on the exchange rate, international crude prices, transport and logistics costs, regulatory charges and marketers’ margins. tribuneonlineng
What Nigerians are paying this week
On 15 October, listed Lagos depot prices ran from ₦1,344 to ₦1,350 per litre, with Dangote at ₦1,348. At the pump in Jos on 14 October, NNPC stations charged ₦1,420 per litre, while other stations charged ₦1,472 to ₦1,492. legitpremiumtimesng
These numbers are not directly comparable. They come from different cities on different days, and one is a depot price while the other is a pump price. Together they show that the ceiling and the pump price are two separate things.
Why stations differ
The government said NNPC Retail would forgo its profit margin and sell petrol at cost for an initial 30 days, with priority for public transport operators. That helps explain NNPC’s lower price. Other stations in Jos charged ₦52 to ₦72 more per litre. premiumtimesngpremiumtimesng
For a motorist, that adds up. Buying 40 litres at ₦1,492 costs ₦59,680, compared with ₦56,800 at ₦1,420, a difference of ₦2,880. premiumtimesng
The volatility the ceiling targets
Wholesale prices have moved sharply in recent weeks. Dangote raised its gantry price from ₦1,265 to ₦1,350 on 12 September, the fourth increase since 21 August. It then cut the price to ₦1,325 about nine days later. The ceiling is meant to soften swings like these before they reach motorists. kemifilaninaijanews
What to watch
Three things will show whether the policy works. The first is whether the monthly ceiling figures are actually published. The second is whether pump prices at non-NNPC stations move closer to those at NNPC outlets. The third is what happens when the 30-day NNPC arrangement ends.
