Transport Fares Rise As Petrol Hits N1,400/L

Transport fares have risen again in parts of the country as petrol price climbed to as high as N1,400 per litre, Daily Trust reports.

The latest increase followed a surge in global crude oil prices, with Brent crude rising above $100 per barrel amid renewed tensions in the Middle East.

Fresh loading data obtained from petroleum marketers showed an upward movement in ex-depot prices across Lagos, Warri and Calabar.

In Lagos, A.A. Rano increased its ex-depot price from N1,275 to N1,279 per litre; while African Terminal, Ascon, Gulf Treasure, Integrated and T.Time hiked their rates to N1,275.

Aiteo, Heyden and Nipco maintained existing prices of N1,275; while Emadeb bucked the trend by reducing its rate from N1,278 to N1,274 per litre.

Dangote Refinery, the dominant fuel supplier, had on Thursday resumed gantry loading of Premium Motor Spirit (PMS) in naira after a week-long suspension, while raising its ex-depot petrol price to N1,215 per litre.

The refinery had suspended gantry and coastal loading on July 15 after introducing a dollar-denominated pricing template for refined petroleum products.

With the adjustment, the ex-depot price increased by N140 per litre, representing a 13.02 per cent rise from the previous price of N1,075 per litre.

Daily Trust reports that Dangote Refinery had cited difficulties in accessing sufficient crude oil under the federal government’s naira-for-crude arrangement to justify the introduction of dollar-based transactions.

Under the temporary dollar-based pricing template, PMS was sold at $0.779 per litre, Automotive Gas Oil (diesel) at $1.087 per litre, and Jet A1 aviation fuel at $0.942 per litre.

Citizens express frustration

Residents lamented that marketers are quick to adjust pump prices when there is an increase but delay in reducing prices when the reverse is the case.

It would be recalled that prior to the renewed hostilities in the Middle East, Brent crude came down to $70 per barrel which was the price it was traded before the war in February.

However, marketers did not bring down the prices below N1,000 although PMS was sold at N700 litre before the US-Iran war.

The federal government had to summon marketers to ensure the fuel prices reflect the drop in international crude price. But no significant reduction was carried out until the renewed hostilities.

In the Federal Capital Territory, residents expressed frustration over the latest increase, saying transportation cost consumes a significant portion of their earnings.

Grace Okeke, a civil servant, said every fuel price increase immediately translates into higher transport fares.

“My salary has not changed, but I now spend much more just getting to work and back. It is becoming impossible to survive in Abuja,” she said.

Another resident, Musa Ibrahim, warned that higher transport costs would inevitably push up food prices.

“Transportation affects everything. Farmers, traders and transporters will simply transfer the additional cost to consumers. Ordinary Nigerians are the ones paying the price.”

Commercial drivers, who spoke to our correspondents, said they were helpless.

A taxi operator, Emmanuel Ujah, explained that frequent price changes make it difficult to plan daily operations.

“You don’t know what petrol will cost tomorrow. That uncertainty affects our business and our families.”

Another driver, Ganiyu Jide, said fuel now consumes the largest share of his daily income. “If we don’t adjust transport fares, we cannot maintain our vehicles or even feed our families,” he said.

Although transport fares in parts of Abuja have not risen uniformly, commuters reported paying between 20 and 40 per cent more on several routes compared with a few weeks ago.

In Lagos, transport operators have begun adjusting fares on some busy corridors, although competition among commercial buses has prevented across-the-board increases.

Fuel marketers are dispensing petrol at varying prices depending on location and supplier, creating uncertainty for transport operators who often buy fuel several times daily.

In Ibadan, Oyo State Capital, however, transport fares have remained relatively stable despite pump prices ranging from N1,260 to N1,300 per litre.

BOVAS sold petrol at N1,260, while Amazing Filling Station dispensed at N1,300.

Commercial driver Kamoru Iyanda said operators could not simply increase fares whenever petrol prices rose.

“It is difficult to adjust fares every time because passengers cannot afford it. Sometimes we absorb the losses,” he said.

Another driver, Amoo Saheed, echoed similar concerns, saying unstable fuel prices had eroded operators’ earnings.

In Ilorin, Kwara State, several major and independent marketers yesterday adjusted their prices upward by between N35 and N85 per litre. AP raised its pump price to N1,290 from N1,220; BOVAS and Abanik, N1,260 per litre; NIPCO, N1,300; NNPCL stations, N1,305; Optimal, N1,255; External, N1,298; Shafa and Atgris, N1,300; Total, N1,285; Olak, N1,260.

Residents said the hike would have a ripple effect on transport fares and prices of goods and services.

They urged the government and relevant authorities to take urgent steps to stabilise fuel prices and cushion the impact on ordinary Nigerians, warning that continued increases would further deepen the country’s cost of living crisis.

One of them, Ola Yemi: “It’s very disturbing, and some of the policies of this government are really disappointing. I am beginning to think seriously that it is because of the forthcoming election. I believe they are trying to raise enough funds without considering the condition of the masses.

“Initially, we were told that the increase was because of the tension in the Middle East, but the situation appears different now,” he said.

In Kaduna, petrol now sells for around N1,350 after dropping below N1,200 only weeks earlier. A commercial driver, Hassan Ya’u Kanti, said the uncertainty surrounding fuel prices was becoming unbearable.

“A few days ago we bought fuel at about N1,190. Now it is N1,350. We don’t know what tomorrow will bring.”

He said passengers often blame drivers for higher fares despite the rising cost of fuel. “We are only trying to survive,” he said.

In Adamawa, NNPCL stations now dispense petrol for N1,310; AA Rano, Eterna and other independent marketers, between N1,360 and N1,370.

The Commercial Manager of Adamawa Sunshine Transport Company, Aminu Muhammad, said the company would first study market conditions before reviewing fares.

“We don’t rush into increasing transport charges. We usually monitor developments for several weeks before taking any decision,” he said.

In Kano, transport fares have remained largely unchanged despite higher fuel prices.

Commercial tricycle operators said they were waiting to see whether prices would stabilise before increasing fares.

Hayatu Usman, a tricycle operator, said the recent increase was not enough to justify immediate fare adjustments.

Passengers interviewed across the city confirmed they were still paying previous transport rates.

Similarly Mujahid Aminu, a student of Bayero University Kano, said he still pays N300, the same amount he has been paying daily from Zawaciki to Bayero University Kano New Campus.

In Maiduguri, Borno State, independent filling stations now sell petrol between N1,370 and N1,390 per litre. Transport fares from Maiduguri to Kano have been increased from N20,000 to N25,000.

The chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN) in Borno, Mohammed Kuluwu, said fluctuating prices were discouraging marketers from loading products.

“Sometimes you buy at a high price only for prices to fall before the product reaches Maiduguri. Many marketers are now afraid to buy.”

Small businesses relying on petrol-powered generators decried the latest increase in operating costs.

Barber Chinedu Nwafor said he now spends significantly more on fuel for both transportation and electricity generation.

“If this continues, I will have no option but to increase the prices of my services,” he said.

‘Market forces to blame’

An energy law expert at the University of Lagos, Professor Dayo Ayoade, said the current situation reflects the realities of Nigeria’s deregulated petroleum market.

According to him, local petrol prices are now tied directly to international crude oil prices and exchange rate movements.

He explained that the Petroleum Industry Act (PIA) limits government intervention in pricing except where market anomalies occur.

However, he argued that Nigeria’s crude oil commitments under existing financing agreements have significantly limited the volumes available for domestic supply.

He said, “When price of crude oil is high, that price will be passed on to consumers. You can see that Dangote at one point was talking about Nigerian marketers paying for its products in dollars because the vast majority of its expenditure is in dollars and it’s spending a lot of money to import crude oil into Nigeria. This means that the crude oil for Naira has, I don’t want to say failed, but has been limited, that has been of limited use to Dangote refinery.”

“As such, we find that the exposure of our local PMS markets to the vulnerabilities of an oil shock and increasing prices due to the US-Iran war will be ongoing. So long as the war continues, the price will go up and Nigeria will be unable to protect itself against that higher cost.”

“The Petroleum Industry Act provides for a market price, so it’s the market that now determines the price in Nigeria. Unfortunately, the federal government and NMDPRA have limited capacity to intervene and insulate consumers from crude oil. One way we could have done it is to expand Naira for crude, but if you go and check, Nigeria has mortgaged the overwhelming majority of its crude oil cargoes for cash and because it has done this, the amount of barrels available is so small and that it’s embarrassing.”

Another industry analyst, Abdullahi Shehu urged the federal government to subsidise crude sale to Dangote in naira.

“He can subsidise N700 per liter to all the local refineries so Nigerians can buy petrol at N500 per liter. This is better for Nigerians than seeing the savings from subsidy removal being looted mercilessly,” he said.

Also speaking, a economist and oil and gas industry expert, Dr Marcel Okeke, said the government reforms are not working.

According to him, any reform that does not translate into a better and more meaningful standard of living for the people cannot be said to be successful.

He said: “The truth is whatever you claim you have achieved and it doesn’t reflect in the well being, welfare and standard of living of the people, what are you talking about?

“Many Nigerians have been made worse off by the reforms.  Look at the situation of petrol alone, as of May 2023, the price per litre was below N200 per litre. At that time it came to N800. But since the Middle East war started, everything has gone haywire, moving around N1,300 and N1,400 and now it is going to N1,500.”

He alleged that the government had failed to do what it ought to have done by fixing the refineries and halting Nigeria’s dependence on imported products.

According to him, this has not happened because of vested interests that are not interested in making it happen due to the benefits they derive from it.

“They want to continue the importation so as to continue the super profits they are making,” he said.

Brent Crude surpasses $101

Meanwhile, global crude oil prices climbed above the $100-per-barrel threshold on Thursday, strengthening expectations of another increase in fuel prices as marketers grapple with rising import and replacement costs.

By 4:40 p.m. WAT, Brent crude had risen 7.43 percent to $101.10 per barrel, while U.S. benchmark West Texas Intermediate (WTI) gained 6.77 percent to trade at $92.71 per barrel. The latest rally has pushed international oil prices up by roughly 20 percent over the past two weeks.

The surge in prices follows renewed security concerns in the Red Sea after Yemen’s Iran-backed Houthi rebels claimed responsibility for attacks on two Saudi oil tankers navigating the Bab el-Mandeb Strait.

The incidents have heightened fears of supply disruptions from one of the world’s most strategic energy corridors.

Saudi Arabia has increasingly relied on its Red Sea export terminal at Yanbu to move crude oil, reducing dependence on the Strait of Hormuz.

However, the latest attacks have reportedly forced several vessels to delay or reroute their journeys, increasing shipping costs and raising concerns over tighter global oil supplies.

Pressure on the market has also intensified outside the Middle East. Kazakhstan has reportedly scaled back oil production after drone strikes disrupted operations at the Caspian Pipeline Consortium terminal on the Black Sea. In addition, Indian state-owned refiners have suspended Iraqi crude cargoes because of security concerns around the Strait of Hormuz, while Russian fuel exports remain limited following months of attacks on refinery infrastructure. (Daily trust)