The presidential candidate of the Labour Party (LP) in the 2023 general elections, Mr Peter Obi, has blamed the federal government for the high energy costs in Nigeria.
In a post, the former Anambra State Governor said if the central government, led by President Bola Tinubu, had planned for the future, Nigerians would not be paying through their nose for premium motor spirit (PMS), otherwise known as petrol, and Automotive Gas Oil (AGO), also known as diesel.
Disruption in the supply of crude oil on the global market has caused consumers to pay more for petrol and diesel in the country.
The United States and Israel waged war against Iran, killing its Supreme Leader, Ayatollah Ali Khamenei, about two weeks ago in airstrikes.
This has triggered tension in the Middle East, with Iran firing missiles at its neighbours, and closing the Strait of Hormuz, a small water path between Iran and Oman, where one-fifth of global crude oil supply passes through.
Before the crisis, PMS was selling at N835 per litre and crude oil was below $90 per barrel. But oil rose above $100 per barrel, causing the price of petrol in Nigeria to hit over N1,200 per litre.
Reacting to the development, Mr Obi said Nigeria felt the shock despite not being attacked because the government failed to plan.
“Many people wonder why any adverse development in the global economy quickly impacts Nigeria. A recent example is the tension involving Iran, which led to an increase in global oil prices and, subsequently, a rise in petroleum prices in Nigeria.
“A few weeks ago, petrol was selling for less than N1,000 per litre, but today it costs over N1,200 per litre. Diesel, which was also priced below N1,000 per litre, is now over N1,500 per litre. These rapid increases illustrate how quickly external shocks can affect the Nigerian economy.
“The reason for this is straightforward: most countries, whether they are oil-producing or non-oil-producing, maintain strategic petroleum reserves to cushion against supply or price shocks. This means that when there is a disruption in the global oil market, they can release part of these reserves to stabilise supply. However, Nigeria lacks such a buffer, so the impact is felt almost immediately.
“The underlying issue is a lack of planning. Countries that engage in planning create buffers against shocks, while those that do not remain vulnerable to them. The old maxim remains true: when a country fails to plan, it has already planned to fail,” he wrote.
Earlier this week, the Minister of Finance, Mr Wale Edun, said the country’s economy was strong enough to absorb external shocks, saying the over 4 per cent growth in the gross domestic product (GDP) in the fourth quarter of last year was a testament to that.