Premium Motor Spirit (PMS), popularly known as petrol, occupies a central and indispensable position within Nigeria’s economy and daily life. Its many applications serve diverse sectors and cater to a wide range of needs, In Nigeria, PMS finds its significance most notably in transportation, it powers an extensive range of vehicles, including cars, buses, taxis, and motorcycles. This system of moving around depends a lot on having a consistent amount of PMS available, forming the backbone of the nation’s transport infrastructure. The country’s erratic power supply has necessitated the widespread use of generators to provide backup electricity for homes, offices, hospitals, and businesses. Here, PMS emerges as an essential commodity, fueling the generators that sustain essential services during power outages. Moreover, PMS extends its utility to industrial applications, serving as a raw material in the production of paints, adhesives, cleaning agents, and various chemical products. Beyond these sectors, PMS is an important part of both farming and construction activities, powering machinery and equipment that drive these essential activities. Its pervasive reach into diverse sectors reaffirms its status as a versatile and indispensable resource.
The economic impact of PMS price fluctuations is felt across the country, resonating through interconnected sectors. When PMS prices rise, This sets off a chain reaction where costs go up, affecting different parts of the economy. Industries reliant on PMS as a key input, particularly manufacturing, bear the brunt of these price hikes. Elevated PMS costs translate into higher production, transportation and distribution expenses, which are crucial for maintaining the flow of goods and services, will ultimately transferred to consumers in the form of elevated prices. Looking at the bigger picture of everyday life, the cost of living in Nigeria is inextricably linked to PMS prices, given the nation’s heavy reliance on fossil fuels. An increase in PMS prices directly impacts the cost of essentials, such as transportation and food, thereby influencing the overall affordability of basic necessities.
The dynamics of PMS pricing have been significantly influenced by the removal of fuel subsidies, an important policy measure undertaken by the Federal Government of Nigeria. Over the years, notable attempts to remove these subsidies took place in 2012, 2015, and 2020, Eventually the government was able to reach a decision 2023. The elimination of fuel subsidies emerges as a crucial factor shaping the trajectory of PMS prices, carrying profound implications for economic stability, consumer purchasing power, and broader fiscal strategies.
Average Price and YoY Changes
Between the years 2020 and 2023, the average price of PMS underwent notable changes, reflecting shifts in economic trends. In 2020, the average price of PMS stood at ₦147.77, marking a 1.59% Year-on-Year (YoY) increase from the preceding year, 2019. Subsequently, in 2021, the average price surged to ₦166.57 across the nation, representing a significant 12.66% YoY increment from 2020.
Continuing this trend, the year 2022 witnessed a further increase in the average price, reaching ₦184.90 across all 36 states and the Federal Capital Territory (FCT). This increase was accompanied by an 11.07% YoY growth, highlighting the ongoing upward trajectory of PMS prices.
The most noteworthy surge occurred in the year 2023, as of June the average price of PMS skyrocketed to ₦303.86, a substantial rise influenced significantly by the removal of subsidies in the country. This monumental increase reflects a staggering 64.34% surge from the previous year’s average and this is expected to increase further as the year progresses.
Price across all States & FCT
Price Summary by Month & Year
Average Price Across the Federation
Over the span of three and a half years, encompassing January 2020 through June 2023, the average price trajectory of PMS across all 36 states and the Federal Capital Territory (Abuja) reflects a consistent upward trend, With notable fluctuations. Looking at how the fuel price changed each month, There were different times when the price Increased and declined.
In July 2020, the price shot up significantly from ₦128.88 per liter in June 2020 (which was the lowest price within the selected time frame) to ₦143.63 per liter. Similar price spikes were observed in March 2021 and 2022, as well as July 2022 and January 2023. However, the cost of PMS remained relatively steady between April 2020 and February 2022. In June 2023, a drastic increase occurred, with the price jumping from ₦238.11 per liter to a high ₦545.83 per liter. This sharp rise was a result of the government removing fuel subsidies.
Price Comparison Across Geopolitical Zone
Price Comparison Across all State & FCT
Year on Year Changes
When observing the year-on-year (YoY) changes in PMS price from 2020 to June 2023, a predominant trend of increasing prices becomes evident. This way a continuous increase in price is noticeable for the years that are being analyzed, but there were some times in 2020 when prices declined instead. In January 2020 and also April to July, there was a decline in the price of PMS compared to the same period in 2019.
A particularly Noteworthy YoY change occurred in June 2023, showcasing a remarkable shift. The recorded price increase reached a staggering 210.31%, soaring from ₦175.89 in June 2022 to ₦545.83.
Month on Month Changes
Looking at the month-on-month (MoM) changes in PMS price from 2020 to June 2023, There is a noticeable consistent price fluctuation in each month. A clear consistent decrease in price from March 2020 to June 2020 can be observed, with the price dropping from ₦145.40 to ₦128.88.
In 2021, price of PMS fluctuated frequently, with both increases and decreases unlike in 2022, when price mostly increased. Additionally, the average price in June 2023 was ₦545.83, a 129.32% increase from the price in May, after the price had consistently declined in April and May.