The Federal Government of Nigeria has declared that it is not responsible for the recent sharp increase in fuel prices across the country.
In a statement issued by the Minister of Information and National Orientation, Mohammed Idris, the government explained that it no longer has the authority to fix fuel prices due to legal reforms brought by the Petroleum Industry Act (PIA).
This announcement comes in the wake of a shocking rise in fuel prices, which has stirred widespread anger and frustration among Nigerians.
Fuel prices in Abuja, Lagos, and other regions have surged, with many residents finding it difficult to cope with the cost of transportation and other daily expenses.
In the capital city of Abuja, fuel prices jumped from N897 to N1,030 per liter.
Lagos, one of the country’s most populous and commercial hubs, witnessed a similar increase, with prices climbing from N855 to N998 per liter.
Other regions across Nigeria are experiencing comparable price hikes.
Nigerians, already grappling with high inflation and economic hardships, are expressing outrage at the soaring costs.
Many feel that this increase will have a ripple effect, leading to further hikes in the price of goods and services across the country.
In his statement, Minister Mohammed Idris clarified that the Nigerian National Petroleum Company Limited (NNPCL) made the decision to raise fuel prices based on prevailing market conditions and that the government did not intervene in this process.
He further explained that the end of fuel subsidies in May 2023 had transferred the responsibility of setting fuel prices to the NNPCL, which now has to respond to global oil market fluctuations.
Why Prices Are Rising
Idris pointed to several key factors that have driven up fuel prices.
One of the most significant reasons, according to him, is the current crisis in the Middle East, which has created instability in global oil markets.
With the ongoing conflicts and rising tensions in the region, crude oil prices have become more volatile, affecting many oil-importing countries, including Nigeria.
Moreover, he cited broader market dynamics as another reason for the price increases.
The minister emphasized that Nigeria, like many other nations, is not immune to these global changes, which have put pressure on the cost of crude oil and its refined products.
“The reality is that we cannot continue fixing petroleum prices because of the Petroleum Industry Act,” Idris said, referring to the law that was signed in August 2021 by former President Muhammadu Buhari.
The Petroleum Industry Act (PIA) is a key piece of legislation aimed at reforming Nigeria’s oil and gas sector, but it has also led to the deregulation of fuel prices.
Under this system, the federal government no longer has control over setting the prices of petroleum products, leaving that responsibility to market forces and the NNPCL.
Minister Idris also highlighted that the fuel subsidy regime ended in May 2023, signaling the end of a practice that had kept fuel prices artificially low for years.
The government, through NNPCL, had been absorbing the financial losses by paying a “differential” cost to maintain lower fuel prices in the market.
However, according to the minister, this could not continue any longer.
“The NNPCL cannot absorb these losses anymore,” Idris said, explaining that the company had been spending heavily to cushion Nigerians from the true market prices of petrol.
The subsidy removal was a major policy decision made by President Bola Tinubu’s administration shortly after he took office in May 2023.
The decision was praised by some experts as a necessary economic reform, but it has also caused significant hardship for the average Nigerian, many of whom rely heavily on affordable fuel for transportation and energy.
In his statement, Minister Idris appealed for calm and understanding from the public, assuring that the government is aware of the difficulties Nigerians are facing.
He expressed hope that prices would stabilize and possibly decrease in the future as global market conditions improve.
“I want to assure Nigerians that while these prices are high right now, we believe they will eventually go down,” Idris said.
He urged the public to be patient, noting that the current market instability, driven by international events, is temporary and could improve in the coming months.