Anambra fuel price hits ₦1,400 per litre

Motorists and commuters in Anambra State are expressing frustration over the recent hike in the pump price of Premium Motor Spirit (petrol).

PUNCH reported, on September 7, 2024, that petrol was being sold for ₦1,400 per litre in Onitsha, ₦1,300 in Nnewi and Ekwulobia, and ₦1,200 in parts of Awka.

Most petrol stations visited in these cities were selling at ₦1,200 or above, with the exception of Nigeria National Petroleum Company Limited (NNPCL) stations, which sold for less.

However, NNPCL stations were not dispensing fuel, with long queues of vehicles waiting for supply.

A filling station manager at the NNPCL in Awka, who requested anonymity, explained the situation:

“We are not currently dispensing at the moment because we have run out of stock and are waiting for a new supply.

“Most of the vehicles you see in the queues have been there for over three days. We did not sell for some days because we had to wait for a directive on the new pump price.

“And when the directive came, we had to adjust our meter to reflect the new price.

“We were selling between ₦780 and ₦820, and when the directive came, we adjusted to ₦920, although the price fluctuates.

“Our action depends on the signals we get; it is not by our making.”

As a result of the price increase, transportation fares have surged by over 50%, forcing commuters to limit their movements.

For example, fares from Onitsha to Awka have risen from ₦1,000 to ₦1,600, and Upper Iweka to Oba now costs over ₦700, up from ₦500.

The hike has also affected the prices of goods, especially foodstuffs, as vendors raise their prices citing the high cost of transportation.

Fuel prices in Anambra vs. other states

The fuel prices in Anambra State are significantly higher compared to other regions in Nigeria.

For instance, in cities like Onitsha, Nnewi, and Awka, petrol prices have surged to between ₦1,200 and ₦1,400 per litre.

These rates far exceed the average in other states such as Lagos, where prices hover around ₦750 to ₦800 per litre, and Ogun State, where fuel costs approximately ₦770 per litre.

In contrast, northern states like Kano and Katsina are experiencing prices closer to ₦850 per litre.

Such disparities are largely driven by local supply chains, logistics challenges, and varying levels of fuel scarcity in each state.

Factors behind regional pricing differences

Several factors contribute to the variation in fuel prices across different states. One major issue is the cost of transporting fuel from coastal areas to inland regions.

States further from Nigeria’s main depots and ports, like those in the North, often face higher logistical costs, which are reflected in the pump price.

Additionally, geographical factors such as the proximity of cities to pipelines and refineries also play a role.

In Anambra, scarcity exacerbates the pricing issue, with long queues at stations and black-market alternatives leading to further price hikes.

Other factors include market competition, fuel hoarding, and illegal trade, which can drive up prices in areas experiencing acute shortages.

Long-term implications of the petrol price hike in Anambra

Impact on Living Standards: If the petrol price hike persists, it will have severe long-term effects on living standards in Anambra State.

Petrol prices directly influence the cost of living, as transportation costs rise and businesses pass the additional expense onto consumers.

Essential goods, especially food items, will continue to become more expensive, affecting access to necessities for lower-income households.

This trend could increase poverty rates, especially in urban areas heavily reliant on public transport and goods movement.

Urban mobility: Urban mobility will suffer due to the rising cost of transportation.

With fares already increased by over 50%, commuters will be forced to reduce non-essential trips, leading to decreased economic activity.

Over time, this could lead to fewer people using public transportation.

It may increase demand for cheaper alternative transport like motorcycles (okadas) and bicycles, despite being less efficient.

This reduction in mobility will likely affect job accessibility, particularly for low-wage workers, further exacerbating unemployment and underemployment.

Business sustainability: Small and medium-sized enterprises (SMEs) in Anambra that rely on fuel for transportation, logistics, and even power generation (due to unreliable electricity) are especially vulnerable.

If the price hikes continue, businesses may experience rising operational costs, reducing profitability and, in some cases, forcing closures.

SMEs in industries such as retail, agriculture, and transportation will face shrinking profit margins, which could have a ripple effect on job availability and the overall local economy.

Moreover, businesses involved in the transportation of goods may need to increase delivery charges, further amplifying inflation.

Insights from economic analysts

Economists warn that if no remedial action is taken by the government or industry stakeholders, the situation could spiral into a broader economic crisis.

Inflationary pressures, driven by fuel prices, would likely worsen, decreasing the purchasing power of households.

Experts suggest that without government intervention through policy adjustments, such as fuel subsidies or price stabilization measures, unrest may grow.

Anambra and other affected states could see a rise in public dissent and protests.

Additionally, fuel price instability may deter domestic and foreign investments in local industries due to an increasingly unpredictable business environment.

In conclusion, the long-term implications of sustained high petrol prices will elevate living costs and reduce urban mobility.

This will also undermine business sustainability, particularly for SMEs.

Without government intervention, these effects could deepen economic inequalities and stall growth across sectors.

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