Nigerians are now paying more money than citizens of the United State of America, USA in real terms for petrol and diesel, bye-products of the crude oil for which Nigeria is Africa’s leading producer. As oil prices tumbled close to $50 after the New Year, US consumers have reaped the benefit in lower prices for gasoline and diesel, according to the latest statistics by US Energy Information Administration.
As at 5 January, pump price for petrol fell to $1.974 and $1.993 in US Midwest and Gulf Coast states. The national average was $2.214. In naira terms, petrol is now being sold in the Midwest at N363 per gallon, compared to N388 in Nigeria. In the US Gulf Coast areas, petrol is now N366 per gallon, compared to Nigeria’s N388. The American gallon is an equivalent of Nigeria’s four litres. (N388 is equal to N97x4litres).
Americans are also paying about N100 less than Nigerians for diesel. Pump price for diesel in the Gulf Coast fell to $3.045 on 5 January. And it was $3.102 in the Midwest. The US average was $3.137. The Naira equivalent for the Gulf Coast buyer is N560 for four litres as against the N670 that a Nigerian pays for a similar volume at N155 per litre. In the Midwest of the USA, the American consumer pays N570 for four litres. In Nigeria, the consumer pays N670.
The US consumer began enjoying pump price relief since 29 December, with petrol prices falling to $2.088 in the Midwest and $2.073 in the Gulf Coast. At the exchange rate of N184, these figures translate into N384 and N381. All the calculations here have been based on N184 to a dollar.
By now, Nigerian officials cannot justifiably claim any kobo of subsidy on petrol, but Nigeria’s co-ordinating minister of the economy Ngozi Okonjo Iweala said on television Monday night that a 90 kobo subsidy remains on the petrol consumed in the country.
Analysts said Okonjo-Iweala was pushing this phantom subsidy to justify funding for Sure-P, since there is no more subsidy money saved to be invested in this fund.
Last December, as Nigeria watched with alarm, the southward move of oil prices, Okonjo-Iweala had said government will not reduce the pump price of fuel despite the clear implication the falling oil prices should have on the local pump price.
She said government would not review the price until the revenue crisis occasioned by the dwindling oil rates is over.
As quoted by news reports, Okonjo-Iweala said in Abuja that the decision to review fuel price either upwards or downwards would only be taken after the current crisis in global oil prices has been settled.
The minister, however, said the government would await expert advice from the Petroleum Products Pricing Regulatory Agency, PPPRA, which is updating the fuel pricing template, to help proffer the best way to address the issue.
The PPPRA is the government agency responsible for monitoring and regulating the price of petroleum products in the country.
“With declining crude oil prices by about 49 per cent, soon there will no longer be subsidy in petroleum products as usual, but, government is not going to take a decision till after the current volatility in crude oil prices has stabilised.” the minister said.
The minister said the Nigerian government does not want to reduce fuel price today “Only for crude oil price to rise tomorrow and we have to adjust the pump price again,” when she spoke, oil prices were around $60. They are now in the $50 region.