By Aliyu Nuhu
The Petroleum Marketers, under the umbrella of IPMAN, are saying that petrol will be sold at N700 per litre if the next imported fuel arrives. But even at the current price, ask them “how market?”.
These days you see pump attendants sitting down for hours without selling 200ltrs. The moment they see a car approaching, they start shouting, ‘Come here! come here!’ It is now the buyer’s market; all that arrogance associated with the seller’s market during scarcity periods has vanished.
During fuel subsidy regimes, NMDPRA said we used to consume 66.8m ltrs of petrol daily. But after the withdrawal of the subsidy, the figure has dropped to 40m. If they increase the price to N700/ltr, the consumption may drop to 20m ltrs per day.
This will shrink the downstream industry and shut down half the filling stations in the country. Nigerians are resilient, and they know how to adjust to every difficult situation. People with many cars will sell them. Those with big cars will go for smaller, fuel-efficient cars. People will take Keke or bus and only travel when and where necessary.
The beauty of a free market economy is that the market forces of demand and supply will set price equilibrium to the acceptance of both sellers and buyers. There will be no market distortion, and petrol marketers will only make marginal gains relative to their level of capital and investment.
We are not scared of a free market. It is a waiting game. If they fail to sell their products due to low demand, they will lower the price. Otherwise, new entrants into the industry will come and offer lower prices for market penetration.
We are waiting.
Aliyu Nuhu writes from Abuja, Nigeria.