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What are the consequences of petrol price increase in Nigeria?

Oil production creates plenty of problems in Nigeria. But what does the government hide? What consequences does petrol price increase have?

dollar in petrol

Today Nigerians live poorer than in 1980: for 25 years the annual per capita income declined from 800 to 300 dollars. People stopped believing the authorities. The infrastructure does not meet any modern requirements and often falls apart. Nigeria is totally dependents on oil and petrol, which kill other sectors of its economy.

Poverty

petrol hike

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President Olusegun Obasanjo was chosen in 1999. He promised to restore order in the economy. But the problems, generated by oil, remained. Particularly the problems were gathered in the swampy Niger Delta, where the major oil fields are located. Despite the fact that there is oil, the region receives more subsidies from the federal government than any other area of Nigeria. Unfortunately, the level of poverty in this region is the highest in the already poor country. In many villages there is nothing but the rickety wooden huts on the banks of the muddy rivers.

The people of the Niger Delta are extremely dissatisfied. As a consequence, there are tribal clashes, skirmishes and attacks on oil fields. Gangs of looters constantly attack oil pipelines, depriving the country of 10% of all produced oil. In general, if we sum up all the above, it doesn’t look good. Nigerians don’t know how to make ends meet. As people often live without receiving a salary for six months. They constantly teeter on the brink of hunger and poverty.

Oil

kill me with petrol

World oil prices continued to rise on Monday amid falling of oil production in Nigeria. Nigerian oil production has declined because of the recent attacks of the radical group ‘Avengers of the Niger Delta’. Recently the media reported that on Friday, the alliance undermined two oil pipelines belonging to Shell. ‘Avengers of the Niger Delta’ is able to ‘bring oil production in Nigeria to zero’.

‘If the oil production in Nigeria drops to zero, the prices will immediately rise. There is no indication that the situation improves in Nigeria’. – Said the edition ICAP broker Scott Shelton.

The increasing in the number of different drilling rigs is a potential increase in US oil production, which limits the growth of prices for ‘black gold’.

petrol sign

Nigerian authorities have already reported that the gasoline prices will increase by two-thirds. And according to the Minister of Energy, the liter of gasoline will now cost a maximum of 145 naira ($ 0.73). Earlier, the price was about 86.5 naira.

This price rapid increase is caused by huge shortage of fuel in the country. It forces Nigerians to pay up to 250 naira per liter on the black oil market. Despite the interesting fact that Nigeria is one of the biggest oil producers in Africa, our country has to import fuel to support its economy.

Due to the huge reduction in the foreign exchange earnings of petroleum products, all importers cannot sell their products at the official rate.

Because the retailers get more profit, the government has made a decision to cut the subsidies.

petrol station

The situation with petrol stations is going worse. People are tired of the oil problems and its increasing price. Government must act in a clever way to protect people.

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