NNPC Increases Fuel Prices After Ending Subsidies in Nigeria
LAGOS – Nigeria’s state-owned oil company, NNPC Ltd, has increased petrol prices by over 15%, marking the second hike in less than a month and the exit from a costly subsidy programme that has strained its finances.
Advertisement
At NNPC fuel stations in Lagos the price of gasoline rose to 998 naira per litre from 858 naira, while in Abuja the price increased to 1,030 naira per litre from 950 naira. Long queues formed as customers came to terms with higher prices.
NNPC, the country’s sole importer of refined products, can now recover its costs in full, having bought gasoline from the Dangote Oil Refinery at 898 naira per litre.
This is the first time in three decades that Nigeria is selling gasoline at full market prices, relieving the treasury of the heavy cost of subsidies, projected to cost the government at least $3.7 billion this year.
President Bola Tinubu scrapped a costly but popular subsidy on petrol last year when he took office, to cut government expenditure. But he reintroduced subsidy partly after inflation skyrocketed, worsening a cost of living crisis and stoking tension among the population.
By September, NNPC said it faced severe financial strain, admitting it was unable to continue importing fuel after weeks of scarce supplies at its petrol stations. The price increase has sparked criticism from labour unions to manufacturers, who warn that it will worsen the cost-of-living crisis.
Gasoline prices are a particularly sensitive issue in Nigeria, where millions of households and small businesses rely on generators powered by fuel due to the country’s creaking national electricity grid.
“We have applied to buy directly from the Dangote Refinery, but this hasn’t been finalised yet. For now, we are still buying through NNPC,” said Billy Gillis-Harry, head of a local fuel traders association.