Marketers Suggest Possible Fuel Price Increase Amidst Naira Decline

The depreciation of the naira against the US dollar, combined with the recent surge in global crude oil prices, has triggered concerns among Nigerians about a potential escalation in the cost of Premium Motor Spirit (PMS), commonly known as petrol.

While the Nigerian National Petroleum Company Limited and other oil marketers have not formally announced any hike in petrol prices, they have acknowledged that factors such as forex scarcity and fluctuations in crude oil prices play a crucial role in determining PMS prices.

Petrol prices escalated from N198 per liter in May to over N500 per liter in June following the removal of subsidy on PMS by President Bola Tinubu. The cost then surged to over N600 per liter in July, prompting apprehensions of further increases in August due to the weakening naira. The naira plummeted below N900 against the dollar at the parallel market, also depreciating against the US dollar at the official Importers and Exporters forex window.

Simultaneously, Brent, the global benchmark for crude oil, traded at about $87 per barrel, having risen from less than $80 per barrel a few weeks ago.

Collins Nnabude, a resident of Abuja, expressed concerns, stating, “The decline of the naira against the dollar and the recent surge in crude oil prices is making us anxious about the impact on petrol prices in Nigeria. It’s likely that fuel prices will rise again this month.”

Oil marketers confirmed the possibility of another petrol price hike this month. Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria, asserted, “As long as the naira continues to lose value against the dollar, the price of petrol at our retail outlets will keep rising.” He urged for the rehabilitation of Nigeria’s refineries to help stabilize prices.

Chinedu Okonkwo, National President of the Independent Petroleum Marketers Association of Nigeria, emphasized that the downstream oil sector had been fully deregulated, leading to fluctuating costs of PMS. He noted that in a deregulated environment, the price of petrol would either rise or fall.

Furthermore, oil marketers indicated that the Federal Government might consider intervention as both crude oil prices and ex-depot prices of petrol continue to climb. Mike Osatuyi, the National Controller Operations of the Independent Petroleum Marketers Association of Nigeria, revealed that President Tinubu had assured possible intervention if necessary.

Osatuyi stated, “President Tinubu should be commended for removing fuel subsidies, as the country would have been heavily burdened. With rising crude oil prices, we can observe a decline in the consumption of petrol, yet an increase in crude oil prices suggests Nigeria will have additional funds. This indicates that we will continue to pay as petrol prices rise.”

He concluded, “The ex-depot price currently hovers between N585 and N590 per liter, subject to crude price and exchange rate changes. The president has affirmed the potential for intervention if required, so we trust they are closely monitoring the situation.”


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