On Monday 8th of January 2018, GlobalPetrolPrices.com revealed that Nigeria is the eight cheapest country in the world to buy petrol. This was released in its data, which is updated weekly for some countries and monthly for others. Petrol is sold at $0.40 per litre, which is $1.52 per gallon in Nigeria.
From the data released, Venezuela ($0.01) came first as the country where petrol is bought cheapest followed by Turkmenistan ($0.29), Kuwait ($0.35), Iran ($0.36), Egypt ($0.37), Algeria ($0.37), Ecuador ($0.39). Nigeria was followed by Bahrain ($0.42), Syria ($0.44) and Qatar ($0.51).
This news comes at a time where the country is considering whether to increase the price of petrol from N145 to N180. At the moment there is a shortage of petrol in some filling stations.
This is what the government is doing to keep the price of petrol at N145
Last week, the Minister of State for Petroleum Resources, Ibe Kachikwu in his presentation to the meeting of the Joint Committees on Petroleum (Downstream) in the National Assembly said that the NNPC is currently the sole importer of petrol whose price is fixed at N145 per litre despite the landing cost being about N171. He also hinted that the pump price might be increased to as much as N180 per litre.
He further added that the country has been bearing the cost of N26 subsidy on each litre of petrol, which is the difference between the landing cost and the current pump price. He said that the subsidy was being paid by the federal government through the Nigerian National Petroleum Corporation (NNPC).
Furthermore, Kachikwu disclosed that independent marketers could no longer import petrol because of the high cost of foreign exchange to do so. He said the marketers could afford to import petrol and sell at N145/litre when the exchange rate was N285/$ but this has become impossible at the current exchange rate. He said that within three months, the NNPC incurred a cumulative loss of N85.5 billion importing petrol and selling at the current retail price of N145 per litre.
Kachikwu explained that the current N145 per litre pump price was fixed in the first quarter of 2016 when crude oil was selling for $49, stressing that with the crude price rising to $67 a barrel, the pump price is no longer sustainable. He added that between 2016 and now, landing cost of the product increased from N133.26 to N171 while pump price remained fixed, which made the independent marketers stop importing the product in October 2017. He stressed that the NNPC had been the sole importer of the product since the independent marketers backed out.