Expert says forex responsible for hike in petrol price

Mr Ronke Onadeko, an expert in oil and gas, says high exchange rate of Naira to the dollar is responsible for increase in price of Premium Motor Spirit (PMS), also called petrol, in the country.

Onadeko disclosed this on Wednesday in Lagos at a policy dialogue on reporting the oil and gas sector.

According to her, when the price of crude oil, which sells in dollar in the international market, drops the high exchange rate of naira affects the price at which refined products are imported into the country.

“We are at the point where government has access to money, but people who want to import petrol cannot find dollar to buy.

“When there is scarcity of dollar, there is always a challenge.

“What happens is that when Nigerians hear that crude oil price has gone down and will be excited that price of petrol will come down, it will not happen.

“When you source forex to buy the PMS and bring it to Nigeria, it has negated the gains you are supposed to make.

“Even if the price of crude drops to 10 dollars per barrel and you buy one dollar at N550, something you were buying at N360 before, you can see there is trouble already.

“You will not see the difference with low crude oil price,’’ she said, adding that it was unfortunate that people kept forgetting the foreign exchange element in the oil business.

Onadeko noted that going back to the subsidy regime as demanded by unions and some Nigerians would further drain the economy that was near sinking.

According to her, finding alternative to petrol is a step in the right direction for the nation to move forward.

“We can move our industries, generators and public transports to gas where we are doing better and the train system is coming up.

“We have more of gas, we don’t have to import it, we are going to save foreign exchange and if we start moving to gas investors will come to invest in gas infrastructure,’’ she said.

The Minister of state for Petroleum Resources, Chief Timipre Sylva, had hinted that the Federal Government would establish gas plants at all NNPC filling stations.

Silva had said this was to ensure the use of Compressed Natural Gas (CNG) as alternative to petrol, saying that CNG was cheaper and cleaner source of energy. (NAN)