Page 4 - AfrOil Week 11 2021

AfrOil COMMENTARY AfrOil

DPR teams have check ed Nigerian filling stations this week to ensure compliance with pricing schedules (Photo: DPR)
DPR teams have checked Nigerian filling stations this week to ensure compliance with pricing schedules (Photo: DPR)

Nigeria, Kenya hike fuel prices

Both countries are responding to rising oil prices, but their decisions have different policy implications

THE fact that petroleum product prices are ris- gasoline at NGN206.42 ($0.54) per litre and
ing in many countries is not surprising, given landing costs at NGN189.61 ($0.50) per litre.
WHAT: the state of world crude oil markets. At the time of this announcement, most of
Nigeria’s PPPRA and After all, oil prices have risen significantly Nigeria’s filling stations were selling gasoline for
Kenya’s EPRA have both since the start of the year, with West Texas Inter- about NGN162-165 ($0.426-0.434) per litre.
hiked fuel prices within mediate (WTI), the main US benchmark, hav- As such, PPPRA’s move seemed to herald an
the last week. ing climbed from $48.25 per barrel as of January upswing of around 27-31% in retail gasoline
1 to just under $65.00 as of earlier this week. prices.
WHY: Brent crude, the main European benchmark, This may not seem like an unreasonably large
The Nigerian agency’s has also gained momentum, climbing from price increase, given that world crude oil prices
decision has been rolled $51.80 per barrel as of January 1 to more than have also been rising, as noted above. (WTI
back by NNPC, while $68.00 per barrel as of earlier this week. prices have climbed by more than 34% since Jan-
EPRA’s decision is likely Not surprisingly, higher oil prices have uary 1 and Brent prices by around 31% during
to stand.
driven up the cost of the fuels made from crude. the same period.) Nevertheless, many Nigerian
This may be a logical development, but it has gar- observers have reacted with anger to the news.
WHAT NEXT: nered a number of visceral responses. In Nigeria For example, a new activist group known as the
The passage of Nigeria’s
new oil law could make and Kenya, for example, government agencies’ National Consultative Front of National Lead-
the dispute between announcements of fuel price hikes have drawn ers of Conscience (NC Front) has accused the
PPPRA and NNPC harsh criticism. This article will examine recent federal government of colluding with fuel mar-
irrelevant. developments in these two countries. keters to change policy in a way that was sure to
impoverish ordinary consumers.
PPPRA proclamation
In Nigeria, the trouble began late on March Criticism and confusion
11, when the Petroleum Products Pricing Some of this frustration stems from consumers’
Regulatory Agency (PPPRA) revealed that mounting concerns about the possibility of sup-
it was raising the pump price of gasoline to ply shortages. Nigerian drivers have been expe-
NGN209.61-212.61 ($0.55-56) per litre for the riencing more difficulty in finding fuel in recent
next month. The agency also said at the same weeks, and queues at filling stations have been
time that it was setting ex-depot prices for growing increasingly long.

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