We woke up today to news that the Federal Government has announced a reduction in the pump price of petrol by N10 from N97 to N87 per litre. The decision to reduce the pump price is a resultant effect of the fall in global crude oil prices.
According to the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, the reduction in the pump price of petrol was necessitated by the dynamics of demand and supply. In her brief, the Minister said "under the approval and directive of Mr. President and in line with Section 6 Clause 1 of the Petroleum Act, that it is my responsibility as the minister of Petroleum to announce that there will be a reduction in the pump price of petrol (Premium Motor Spirit) by N10… Therefore, the reduction will be from N97 per litre to N87 per litre effective as from midnight, Sunday January 18, 2015."
How You Can Benefit
1. Potential Reduction in the Cost of Public Transport
The first benefit that the average Nigerian can expect from a reduction in the pump price of petrol is the possibility of a reduction in the cost of public transport especially by road. The fact that the Nigerian public transportation sector is not strictly regulated by the government suggests that is operating a free market system in which the dynamics of demand and supply could affect the price.
Hence, (barring coordinated price-fixing unionism) we can start to expect competitive pricing in the public transport sector. The main reason behind the potential competitive pricing is that the profit margins of mass transport operators will improve because of reduced operating costs (fuel); hence, they can afford to reduce the price in order to capture a bigger market share.
2. More Mileage on Your Previous Fuel Purchases
The second benefit to the average Nigerian is that you will get more mileage out of your previous fuel purchases if you own a car or motorcycle. As at this time yesterday, N1000 will buy you 10.3 litres of petrol at the N97 pump price. Thankfully, you can now expect the N1000 to buy you 11.5 litres of petrol at the new N87 price. The same is also applicable to the volume of fuel you'll be able to buy to power your generator.
3. Cheaper Shipping Costs From Couriers Services
Many people are now shopping online; nevertheless, buying goods online means that the item will be shipped to your doorstep by the store's in-house delivery service or a third-party courier service. An important benefit that you can expect from the drop in the pump price of petrol is that the shipping costs for items bought online will be reduced.
Hence, online stores will offer competitive sales discounts or shipment terms in order to capture a larger market share. The offering of sales discount or shipment terms invariably means that you'll be able to buy more goods and spend lesser cash on shipping costs.
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