Dare Babalola
The 2023 presidential candidate of the Labour Party, Peter Obi, has attributed the recent petrol price hike to Nigeria’s economic vulnerability.
In a statement posted via his X account on Thursday, Obi said the situation is a result of the lack of planning by policymakers, citing the country’s reliance on imports and absence of strategic reserves as underlying factors.
He cited the recent escalation of tensions involving Iran and the consequent surge in global oil prices as an example, expressing concern over the rapidity with which Nigeria’s economy is affected by external shocks.
“When Countries Fail to Plan,” Obi titled the statement, setting the tone for his scathing critique of Nigeria’s economic management.
He added, “Many people wonder why any adverse development in the global economy quickly impacts Nigeria. A recent example is the tension involving Iran, which led to an increase in global oil prices and, subsequently, a rise in petroleum prices in Nigeria.”
Obi went on to illustrate the devastating impact of the global oil price hike on Nigerians, saying, lA few weeks ago, petrol was selling for less than ₦1,000 per litre, but today it costs over ₦1,200 per litre. Diesel, which was also priced below ₦1,000 per litre, is now over ₦1,500 per litre. These rapid increases illustrate how quickly external shocks can affect the Nigerian economy.”
The former governor of Anambra State attributed this vulnerability to a glaring lack of planning on the part of Nigerian policymakers.
“The reason for this is straightforward: most countries, whether they are oil-producing or non-oil-producing, maintain strategic petroleum reserves to cushion against supply or price shocks.
“This means that when there is a disruption in the global oil market, they can release part of these reserves to stabilize supply. However, Nigeria lacks such a buffer, so the impact is felt almost immediately,” the former presidential candidate added.
Obi continued, “The underlying issue is a lack of planning. Countries that engage in planning create buffers against shocks, while those that do not remain vulnerable to them. The old maxim remains true: when a country fails to plan, it has already planned to fail.”
The war in Iran has led to a significant increase in petrol prices in Nigeria.
The conflict has disrupted global oil supplies, causing crude oil prices to surge above $100 per barrel. The rising global crude prices have forced local refineries and marketers to increase fuel prices.
For instance, the Dangote Petroleum Refinery has already hiked its ex-depot price of petrol to ₦874 per litre, leading to retail prices soaring between ₦1,200 and ₦1,450 per litre in major cities like Lagos and Abuja.
The Nigerian government is monitoring the situation and may introduce policy adjustments to protect citizens.
However, experts warn that the impact of the war on petrol prices will be uneven, with oil-exporting countries like Nigeria potentially benefiting from higher crude prices, while import-dependent nations face increased costs.
To mitigate the effects, Nigeria needs to boost domestic oil production, curb oil theft, and enhance refining capacity.
