Experts urge government intervention in rising petrol prices | The Guardian Nigeria News

Experts have expressed deep concern over the recent rise in petrol prices in Nigeria which has reached unprecedented levels. They claim that the current pricing, which is above €1,100 per liter, is unsustainable and poses a significant threat to the country’s economy and the well-being of its citizens.

Mojeed Dahiru and Ayo Akinfe, who were guests on Friday edition of Inside Sources with Laolu Akande, a socio-political program broadcast on Channels Television, noted that the increase in petrol prices has impoverished Nigerians – who currently earn a minimum wage of N70 . 000 – reduced productivity and caused a serious economic crisis.

They argue that market forces should not dictate fuel prices, especially when energy security is a matter of national interest.

Dahiru expressed his belief in subsidies, saying: “I believe that every country should determine the affordability threshold for energy prices for citizens because energy is the oxygen of the economy.”

He called for government intervention to regulate prices and ensure they remain within the reach of the average Nigerian.

He further explained: “What oxygen or air is to the living being is what oxygen or air is to the economy. So I do not believe that the energy price should be controlled by market forces at all times.” Dahiru added that now that refineries in Nigeria are operational, government can intervene, both on the production side and the utilization side, to ensure that energy prices fall below the affordability threshold for Nigerians.

Comparing the situation in Nigeria to what is being called the “cost of living crisis” in Britain, he said: “In Nigeria, I can assure you that what we have is a cost of living crisis. The government must take on this role because energy security is a matter of national security. The government therefore has a responsibility to intervene in pricing.”

Dahiru also stressed the need for the Nigerian National Petroleum Company Limited (NNPCL) to ensure that the Old Port Harcourt refinery, as well as the Warri and Kaduna refineries, come online to help ease pressure on energy prices.

Ayo Akinfe, chairman of the Central Association in the United Kingdom, agreed with Dahiru, suggesting that nothing prevents federating units from operating their own refineries to increase product availability.

He noted: “What we have witnessed in Nigeria is that cliques have created artificial scarcity to increase prices. If you have 20 to 30 refineries, that is full capacity and prices will come down,” he adds: “Ultimately, we need government policies that encourage investors to open refineries. For example, we have 36 states. I don’t see why every state shouldn’t have at least one refinery to supply its people. That will bring prices down.”

Bretton Woods institutions such as the World Bank and the International Monetary Fund have advocated eliminating energy subsidies and floating the naira, saying the inability to implement these policies has plunged Nigeria into severe inflationary pressures.

After the inauguration of President Bola Tinubu in May 2023, he removed the petrol subsidy and floated the naira. Petrol prices subsequently shot up from less than N200 per liter to over N1,100 in many parts of the country, while the naira depreciated from about N700/$ to N1,600.

As a result, food and commodity inflation has soared, leaving Nigerians grappling with what is believed to be the worst cost of living crisis since the country’s independence over six decades ago.