Fuel hike: Market traders count the cost as pump prices breach N1,400

By Komeno Ayetuoma, Lagos

“From the bus stop to the market was 300 naira before, but now it is 800 naira,” said Gentle Njoku, a foodstuff trader.

For Mrs Favour Nweke, a tailor, the arithmetic runs through her driver. The man who carried her goods for N2,000 now charges N3,000. 

“It is not as if the goods themselves are expensive, but it is the increase in fuel prices and the cost of transportation that is making our market prices increase,” she said.

How prices got here

Petrol was about N830 per litre before the Middle East crisis earlier this year. Retail outlets now sell it between N1,400 and N1,450. Dangote Refinery raised its gantry price to N1,350 on 12 September, the fourth increase since late August and a cumulative N185 a litre. Brent crude was above $105 at the time. Disruptions around the Strait of Hormuz have added to the pressure.  

The price reforms set the stage. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), says petrol pricing is now fully deregulated and subject to market forces. Global shocks therefore reach Nigerian pumps much faster than they once did. 

The official data has not yet caught up. Headline inflation eased to 15.39% in August from 15.43% in July. Food inflation was 19.57% year-on-year, and its monthly rate fell to 1.02% from 5.56% in July. Those figures predate the September pump increases. 

What government is doing

President Bola Tinubu has ruled out a return to subsidy. 

“We must accelerate the cheaper alternatives we have been building at home,” he said. 

The alternative is compressed natural gas. The President says more than 120,000 vehicles have been converted, supported by over 400 conversion centres and more than 90 refuelling stations. 

He cited the Enugu–Nsukka fare falling from N2,500 to N1,500, and a 40 per cent fare cut on some Abuja routes. States have been directed to deliver measurable fare reductions from 1 October.

What experts and stakeholders say

Labour wants more. NLC president Joe Ajaero said “These new costs continue to inflict and deepen poverty among the populace,” and called for wage awards, more crude sold in naira to local refineries, and expanded storage. Civil-service unions gave the government until 30 September to act and asked for petrol at N500.  

Market analysts see little near-term relief. Olatide Jeremiah, CEO of Petroleumprice.ng, warned that pump prices “could hit N1,500 per litre” in major cities if the crisis persists. 

Victoria Ibezim-Ohaeri of Spaces for Change has said households would face higher transport and food costs as the increase filters through the economy. Opposition figure Atiku Abubakar argues that “palliatives cannot substitute for sound economic policy.”  

Coping

For now, relief is mostly practical. Commuters and traders on routes served by CNG buses stand to benefit first, and owners of commercial vehicles can weigh conversion. 

The government says CNG vehicles spend 60 to 80 per cent less on fuel. Traders can also pool deliveries and buy in bulk to cut the number of trips. That spreads transport costs across more goods. 

For vendors like Mrs Onyinyechi Confidence, who sell frozen food, the squeeze is immediate. 

“Sometimes customers come and start complaining that the money is too much, and I will try to convince them that it is the new price,” she said. “It’s really affecting us, and it’s not easy for us,” she said. 

Outlook

Two tests arrive this week. The first is whether CNG savings reach commuters as lower fares from 1 October. 

The second is how the government answers the workers’ 30 September deadline. 

Elections are less than six months away, so the politics of petrol will only sharpen. 

And with crude above $100, pump prices are unlikely to ease soon.