Over the years price of petrol as been regulated by various successive governments in Nigeria. In 2012 the Federal government announced the complete removal of petrol subsidy (Petrol was priced at N141 naira per liter ) which lead to a nationwide protests after which the government agreed to a partial removal of subsidy (Petrol was priced at N97 naira per liter ).
In Jan 2015 government announced a price decrease in the regulated price of petrol (Petrol was priced at N87 naira per liter ). In January 2016 government also announced another price decrease (Petrol was Priced at N86.50 naira per liter )
Today the country is currently experiencing fuel supply challenges , government has announced a new price hike on 11th may 2016 signaling the removal of petrol subsidy (Petrol now priced at N145 naira per liter ).
Will this new policy finally ease supply challenges and stimulate more investment into the petroleum sector??????
If you are living in Nigeria then you must be familiar with the petrol crisis that occurred some weeks ago where many Nigerians had great difficulty in buying petrol for their cars and generators . Many experts offer diverse opinions with regards to the cause and solutions to the petrol crisis.
Presently the government officially pegged the price of petrol at
N86.50 per liter, some have argued that its not just possible to have a uniform price of petrol across the entire country owing to many differentiated variable cost due to diverse distribution challenges of conveying products from source to various locations.
Presently Nigeria has about 3 petroleum refineries which are not yet operating at optimal capacity hence the government has to import petrol from overseas to meet up with the shortfall.
From the chart above Lagos state has one of the lowest average purchase price of petrol paid by households, one very important factor responsible for this situation is the presence of a sea port in Lagos through which importation of petrol is facilitated . Also note Lagos does not have any petroleum refinery .
From the charts above there exist price disparity among various geopolitical zones in the country.South west with the lowest average purchase price of petrol paid by households and south east has the highest purchase price paid by households.
In conclusion it very much safe to say that the price of petrol in Nigeria is not at par across the entire states , because some states have certain comparative advantages (closeness to source ) and challenges (high distribution cost).