The naira’s depreciation against the US dollar and the recent surge in global crude oil prices have raised concerns among Nigerians about a potential increase in the pump price of Premium Motor Spirit (PMS), commonly known as petrol.
While the Nigerian National Petroleum Company Limited and other oil distributors haven’t confirmed a price hike, they acknowledge that foreign exchange scarcity and crude oil price trends are significant factors influencing PMS pricing.
After President Bola Tinubu eliminated the PMS subsidy, petrol prices surged from N198/litre in May to over N500/litre in June and then leaped to over N600/litre in July. Given the naira’s plummet against the dollar, there’s speculation of another rise in August.
On Thursday, the naira fell below N900 against the dollar in the unofficial market and also depreciated in the official Importers and Exporters forex window. Meanwhile, Brent crude was trading at roughly $87/barrel, up from below $80 just a few weeks prior.
Abuja resident, Collins Nnabude, voiced his concerns about the naira’s fall and its impact on petrol prices, predicting another price jump this month.
Oil marketers echo this sentiment. Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria, emphasized that petrol prices would continue to climb as the naira depreciates against the dollar. He urged President Tinubu to prioritize the restoration of Nigeria’s refineries and suggested declaring a state of emergency to expedite repairs.
Chinedu Okonkwo, National President of the Independent Petroleum Marketers Association of Nigeria, pointed out that the fluctuation in PMS prices is a natural outcome of a fully deregulated downstream oil sector.
Some oil marketers believe the Federal Government might step in given the rising crude oil prices and the escalating ex-depot petrol price. Mike Osatuyi, the National Controller Operations of the Independent Petroleum Marketers Association of Nigeria, praised President Tinubu for eliminating fuel subsidies. He believes the subsidy removal has saved the country from financial strain and anticipates potential governmental interventions in response to the escalating prices.