As premium motor spirit (PMS) or petrol prices rises, the demand from the product has taken a plunge. This is not unconnected with the removal of subsidy and the full deregulation of petrol, leaving it to the dictates of market forces.
According to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the daily consumption of petrol fell by as much as 92 per cent. The report indicated that as at August 20, 2024, petrol consumption had dropped to 4.5 million litres per day, compared to 60 million litres per day in May 2023.
The NMDPRA’s Daily Truck Out Report reveals that only 16 out of Nigeria’s 36 states received product allocations from the Nigerian National Petroleum Company Limited (NNPCL) during August 2024.
The drastic reduction in petrol consumption, it was gathered, comes on the heels of the subsidy removal ending a decade-long subsidy programme that had cost the government approximately $15.7 billion or N12 trillion.
Checks around the Lagos metropolis indicate that most independent marketers either have no stock or are recoding low patronage. An oil marketers in Mushin , Lagos informed The Nation that the high cost of the product has made it discouraging for some fringe marketers to continue to sell. This, he noted, is coupled with the fall in motorists’ patronage.
According to the marketers, who pleaded to remain anonymous, most marketers now pair to buy one truck because of the cost and low patronage. He expressed fears that marketers may have to abandon the business and take their investment elsewhere.
The once thriving racketeering of the product across the borders has also been grossly affected owing to the subsidy removal. According to our source, the high cost of petrol locally has affected the once lucrative business of smuggling it across the borders.
It was also gathered that with the high interest in the usage of Compressed Natural Gas (CNG) by automobiles, the rush for petrol is becoming unattractive. A comparative study of using petrol and CNG indicated that about 90 per cent cost saving is saved on petrol if CNG is used.
“While fuelling your car with petrol will cost you N150,000 for one month, it’s only N15,000 for the same trip on CNG,” said analysts at Sydani Group.
