Food Prices Expected To Drop In Nigeria With Government’s New Petrol Price Policy- PETROAN

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), has envisaged a reduction in prices of agriculture products following envisaged drop in transport costs.

The association said the new policy that aims at reducing prices of petrol would translate to drop in transport fare.

The Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, on Thursday said government proposes a measure to cap petrol prices at about 1,350 naira ($1.02) per litre, asking ‌refiners and fuel importers to absorb temporary increases and recoup losses once costs ease.

The minister explained that the scheme would cover petrol supplied by the Nigerian National Petroleum Company Limited (NNPC), with public transport operators identified as priority beneficiaries.

Listing benefits of the policy, PETROAN believes it could provide significant economic relief if properly implemented. 

According to Obele, a reduction in the cost of petrol for public transport operators could translate into lower transportation fares, putting more disposable income in the hands of commuters and households.

The association said the policy could also reduce the cost of moving agricultural produce from rural communities to urban markets. This could help moderate the prices of food and other essential commodities, particularly where transportation and logistics account for a significant portion of the final cost.

The PETROAN further noted that lower transportation costs could support small businesses, traders, farmers, manufacturers and other productive sectors that depend heavily on road transportation. 

Reduced logistics expenses could enable businesses to sustain operations, protect jobs and improve productivity.

The association also believes that the intervention could help ease inflationary pressures by reducing the transportation component embedded in the prices of goods and services. If the savings are effectively transmitted across the supply chain, consumers could experience some relief from the current cost-of-living pressures.

Speaking on the development, the national president of PETROAN, Dr. Billy Gillis-Harry, commended the federal government for recognising the strategic importance of transportation to the Nigerian economy.

Dr. Gillis-Harry said the intervention could produce benefits beyond the transport sector, explaining that when transport operators spend less on petrol, commuters could benefit from more affordable fares, traders could move goods at lower costs, farmers could access markets more efficiently, and businesses could reduce logistics expenses.

He, however, urged the federal government to ensure that the programme is implemented transparently and efficiently, with clear guidelines on the exact discount per litre, eligible beneficiaries, monitoring mechanisms and distribution channels.

The PETROAN national president stressed that the success of the policy should not only be measured by the volume of petrol sold at a discount but also by its actual impact on transportation fares, food prices, business operating costs and household purchasing power.

PETROAN therefore called on NNPC, transport operators, petroleum marketers, relevant government agencies and other stakeholders to cooperate fully to ensure that the intervention achieves its intended objectives.

The association also urged the federal government to carefully assess the outcome of the 30-day programme and consider further measures that could sustain the economic benefits if the intervention produces measurable reductions in transportation costs and inflationary pressures.

The PETROAN reiterated its commitment to supporting policies that promote affordable petroleum products, lower logistics costs, economic stability, sustainable business activity and improved living standards for Nigerians.