On Thursday, oil marketers insisted on a possible hike in the pump price of Premium Motor Spirit, popularly called petrol, following a further plunge in the value of the naira against the United States dollar.
Concerns about whether the price of gas at the pump could remain the same increased when the local currency declined against the dollar on the black market from 900 to 920 on Thursday.
About two weeks ago, the naira reached 945 to the dollar in the black market. Last week, it recovered.
The local currency started moving southward this week, nevertheless, which has concerned economic managers and oil and gas industry stakeholders.
The PUNCH reports oil dealers and marketers on Thursday saying that with the exchange rate at N920/$, the pump price of petrol could not remain at N617/litre, particularly if the current exchange rate lingered.
They stated that the currency rate was approximately N750/$ to N800/$ at the time the cost of petrol was set at N590/litre to N617/litre, and they again estimated a cost of between N680/litre and N700/litre for PMS, based on an exchange rate of N920/litre.
However, the oil marketers argued that since the Federal Government had vowed not to raise the price of fuel, it was thus “subsidising the commodity secretly, based on the prevalent exchange rate reality.”
According to the predictions and analysis of oil marketers and dealers, the Federal Government may thus be subsidising petrol by around N90 due to the collapse of the local currency against the US dollar.
On Thursday, it was reported that the ex-depot price of petrol was approximately N585 per litre. According to the predicted price of N680 per litre and the current exchange rate, the government may be required to pay around N95 per litre in subsidies.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority said last week that the country’s average daily fuel usage was 52 million litres.
This suggests that the government may be obliged to pay nearly N153 billion in fuel subsidies each month when multiplied by the predicted subsidy of N95 per litre and computed for a month.
President Bola Tinubu had directed that the price of petrol not rise, according to Ajuri Ngelale, the Special Adviser to the President on Media and Publicity, who spoke to reporters from the State House last week.
“Mr President wishes to assure Nigerians following the announcement by the NNPC Limited just yesterday (Monday) that there will be no increase in the pump price of PMS anywhere in the country. We repeat, the President affirms that there will be no increase in the pump price of PMS,” he said
NNPCL had also last week, spoken up as regards the widespread concern of a possible hike in the pump price of petrol.
“Dear esteemed customers, we at NNPC Retail value your patronage, and we do not have the intention to increase our PMS pump prices as widely speculated. Please buy the best quality products at the most affordable prices at our NNPC Retail stations nationwide,” the company stated.
The downstream division of NNPCL, NNPC Retail, retails refined petroleum products for the organisation.
Recall that oil marketers had previously stated that, should the spike in the exchange rate continue, the price of petrol will increase to between N680 and N720 per litre in the upcoming weeks.
On Thursday, they reiterated their assertion that the price of petrol will certainly increase despite the stances taken by NNPCL and the Presidency because the decline in the naira exchange rate had not subsided in recent days. They emphasised that the only solution would be if the government had discreetly ended fuel subsidies.
