Nigerians are apprehensive of a possible hike in the pump price of Premium Motor Spirit, popularly called petrol. This is informed by the fall of the Naira against the United States dollar, coupled with the recent rise in global crude oil prices.
Although the Nigerian National Petroleum Company Limited and other oil marketers have not announced any increase in petrol price, they confirmed that the scarcity of foreign exchange and the rise in crude oil prices were key factors that determined PMS price.
REPORTERS AT LARGE earlier reported that the Naira fell 3.2% to N782.38 per dollar in the market-driven Investors and Exporters (I & E) window on Tuesday. In the parallel market, it was alleged to have traded at N900 per dollar. The volatility is attributed to the mounting backlog of unmet dollar demand and shortage of the greenback at the official and retail ends of the market.
Petrol price increased from N198/litre in May to over N500/litre in June after President Bola Tinubu removed the subsidy on PMS.
The cost jumped again to over N600/litre in July, and given the crash of the naira against the dollar, there were concerns that it might rise further in August.
Also on Thursday, Brent, the global benchmark for crude oil, was traded at about $87/barrel. It traded for less than $80/barrel a few weeks ago.
Oil marketers also confirmed the possibility of another hike in petrol prices this month.
The PUNCH reports the President, of Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, as saying, “So long as the naira is losing against the dollar, the price of petrol in our retail outlets will continue to increase.”
He called on Tinubu to ensure Nigeria’s refineries were returned to use.
He said, “We have requested that the President declare a state of emergency on our refineries to speed up their repairs.
“That is the one sure way to go, to be able to predict the price of petroleum products because for now, every PMS you buy in any retail outlet is dollarized.”
Also speaking on the development, the National President, of the Independent Petroleum Marketers Association of Nigeria, Chinedu Okonkwo, said the downstream oil sector had been fully deregulated and, the cost of PMS would continue to fluctuate.
“When there is deregulation and no subsidy, the price of petrol would either go up or come down. But if you want to profiteer, those who bring in and sell at cheaper rates would put you out of business.”
Also, oil marketers said the federal government may likely intervene as crude oil prices and the ex-depot price of petrol kept rising.
The National Controller Operations, the Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, told The PUNCH on Thursday that President Tinubu had promised to intervene, if necessary.
He said, “First of all, we must thank President Tinubu for removing fuel subsidies because the country would have been under a big burden by now.
“Given the rising prices of crude oil, we can now see that the quantity of petrol they said we used to consume had dropped. At the same time, we can see that price of crude oil is increasing, meaning; Nigeria would have more money in addition to the money the country has saved from subsidy removal. Then, since we have more money in the country, we have to pay as the petrol price keeps rising.”
He added, “Ex-depot price is now between N585 and N590 per litre depending on the depot, and it will either go up or come down, depending on crude price and exchange rate.
“But the president has said that there would be interventions if need be. So, we believe they are watching as the situation arises.”
