A Review of the Nigerian Energy Industry

Nigerians blame petrol price disparity on poor monitoring, regulation

Fuel-dispencer…Poll shows 33% decline in Nigerians who buy fuel above N97

OSCARLINE ONWUEMENYI 18 August 2014, Sweetcrude, Abuja – Many Nigerians have decried the growing phenomenon of petrol price disparity across the country, in spite of the government subsidy currently in place, a recent poll has revealed.

The Second Quarter, Q2, results of the Petrol Price Monitoring Polls conducted by NOIPolls revealed more than half of the respondents (57 percent) were of the opinion that petrol price disparity stems from lack of monitoring of petrol stations by the government.

It however showed a significant 33-point decline in the proportion of Nigerians who bought petrol above the official pump price from April (76 percent) to June 2014 (43 percent).

An assessment of the price paid per litre of petrol by point of purchase revealed that the majority of respondents who bought petrol from major marketer filling stations (54 percent) purchased at the official price of N97. The majority (76 percent) of respondents who bought petrol from Independent marketer filling stations bought at a price above the official pump price with most (23 percent) buying at N120. In addition, the majority of respondents who bought petrol from hawkers (48 percent) bought petrol above N130.
Responses revealed that slightly more than half of the respondents (57 percent) were of the opinion that petrol price disparity results from lack of monitoring of petrol stations by the Government.  The South-East zone (61 percent) accounts for the highest proportion of this group.

In addition, some of the respondents reported that disparity in petrol price across Nigeria stems from the hoarding of petrol by petrol stations in order to exploit the public, while 19 percent of the respondents were of the opinion that the differences in the cost of importing petrol gave rise to petrol price disparity.
Background research indicated that some sense of normalcy in the supply of petrol across Nigeria was restored in April this year following the fuel scarcity experienced in most of the first Quarter, Q1.
Further findings revealed that the South-East (80 percent) and North-East (74 percent) zones accounted for the highest proportion of respondents who bought petrol above N97 in Q2. Also, the majority of respondents that bought petrol from major marketer filling stations (54 percent) bought at the official price of N97, whereas the majority (76 percent) of respondents who bought petrol from independent marketer filling stations bought at a price above the official pump price.

In January 2012, the Petroleum Products Pricing Regulatory Agency (PPPRA) along with the government announced an increase in the price of petrol from N65 to N141 as a result of the removal of subsidy for the reason that over a trillion Naira had been spent in 2011 on subsidy.

The removal of the fuel subsidy led to days of protest by Nigerians led by organised labour and civil societies who were unhappy about the potential hardship this action would cause Nigerians and the lack of notice by the government to implement such plans. In line with this, the government as a stop-gap measure partially removed subsidy, thereby bringing the official pump price of petrol to N97.

More than half of the respondents (57 percent) said they buy petrol buy from major marketer filling stations. In addition, 34 percent buy petrol from independent marketer filling stations while nine percent buy from petrol hawkers.

The South-West (69 percent) and North-Central (68 percent) zones account for the highest proportion of respondents who purchase petrol from major marketer filling stations. The South-East zone (50 percent)recorded the highest percentage of respondents who mainly purchase petrol from independent marketer filling stations, while the North West and North-East zones, account for the highest proportion of respondents who mainly purchase petrol from hawkers with 16 percent each.

Trend analysis across the 3 months in Q2 revealed a progressive increase in the proportion of respondents who buy petrol at the official price N97 from April (24 percent) to June (56 percent) 2014 with a total 32-point increase. This highlights the stability in petrol supply in June where more respondents purchased petrol at the official price compared with April 2014.
Further quarterly assessments revealed that more respondents bought petrol above the official price in Q2(60 percent) compared to Q1 (53 percent), and this is likely due to the understanding that more respondents bought petrol from independent marketer filling stations and slightly more from petrol hawkers than from major marketer filling stations in Q2 when compared to  Q1.
The key objective of the Petrol Price Monitoring Poll series is to monitor and analyze the pump prices paid by Nigerians nationwide, as well as to measure the perception of Nigerians about petrol price disparities, the uses of petrol and the removal of fuel subsidies.

Over 1,500 respondents were interviewed in the three months of Quarter 2 (April – June 2014) and the respondents were asked the same ten questions for each monthly poll, four of these questions will be reviewed in this press release.

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