The price of petrol in Abia State was the highest in four months out of the past eight months. The average prices of petrol (PMS) in the state for four consecutive months (November 2020-February 2021) was N179, N176, N174 and N180, a review of the recent data release of the National Bureau of Statistics showed.
In another three months when Abia residents did not pay the highest prices for petrol, the people still paid one of the five highest prices of petrol across the 36 states in the country. It was only in May 2021 that Abia State was not among the top five states with the highest pump price of petrol in the country.
Ebonyi and Plateau state come next, being among the top five states with the highest petrol prices four times.
All the same, petrol was sold at the highest average price of N200.9 within the 8-month period in March this year, and that was in Lagos state.
Could this be attributed to the inefficient management of the Petroleum Equalisation Fund?
To have a more even price of petroleum products across the country, the Petroleum Equalization Fund (PEF) Management Board was established primarily to compensate marketers of petroleum products such as gasoline, diesel, and kerosene, which are disadvantaged due to longer travel distances and higher transportation costs of refined products from depot supply points to retail outlets. This enables the sale of petroleum products at uniform prices throughout the country, despite varying costs of transporting products to different destinations.
The situation changed when the Nigerian government deregulated diesel entirely in 2008 and kerosene in 2016. This entailed ceasing subsidy payments for the two products and ceasing to charge marketers fees for the equalisation fund. Due to the deregulation of kerosene and diesel, and the cessation of the petroleum equalisation fund’s augmentation of the prices of these two products, it would be expected that the price of kerosene and diesel will be high in Abia if the high cost of petrol in the state is related to the inadequacy of PEF.
Not so. The price of diesel and kerosene in the state is not in the five highest price range, in all the eight months under review.
A review of the price watch data for kerosene over the last eight months revealed that Abia State was among the top five states with the highest kerosene prices only in May 2021. Even then, in that month, the average price of kerosene in the state was the 5th in the country, at N421.97.
Similarly, a review of diesel price watch data from the previous eight months revealed that Abia was only listed among the five states with the highest diesel prices once, and that was in November 2020. Also, in that month, the average price of diesel in the state was the 5th in the country, at N248.75.
For the whole half-year of 2021, Abia state has not been among the top fifteen states with the highest diesel prices.
This departure of the price of diesel and kerosene from the trend of petrol price reveals that what determines the price of petrol in Abia has less to do with the distance of Abia state from petroleum products’ depots and more to do with the dynamics of marketing the petrol commodity in the state.
Speaking about the possible cause of the high price of petrol in Abia state, Comrade Williams Akporeha, the president of the Nigeria Union of Petroleum and Natural Gas Workers (NUNPENG), stated over the phone that “petroleum marketers and illegal marketers could be responsible for the high price of petroleum in Abia state.”
Thus, arguments for or against continued uniformity of petroleum products price across the 36 states and the Federal Capital Territory (FCT) need to consider the economic realities, industry demand and other market peculiarities of each state.