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Naira Decline: Marketers Predict An Increase in Fuel Prices

Nigerians are concerned about a potential increase in the price of Premium Motor Spirit, also known as gasoline, at the pump due to the decline of the naira against the US dollar and the recent increase in crude oil prices worldwide.

Increase In Fuel By Techrectory
Increase In Fuel By Techrectory

Although the Nigerian National Petroleum Company Limited and other oil marketers have not declared an increase in fuel price, they have acknowledged that the lack of foreign currency and the increase in fuel price, were the two main factors influencing the price of PMS.

After President Bola Tinubu removed the subsidy on PMS, the price of fuel increased from N198 per litre in May to over N500 per litre in June 2023.

In July, the price increased once more to over N600/litre, and given the collapse of the naira against the dollar, there were worries that it might increase even more in August.

On Thursday at the parallel market, the value of the naira against the dollar fell below N900. At the official Importers and Exporters forex window, it also decreased in value relative to the US dollar.

Additionally on Thursday, the price of Brent, the world’s standard for crude oil, was around $87 per barrel. A few weeks ago, it traded for less than $80 per barrel.

Collins Nnabude, an Abuja resident, said, “When you consider the effect on petrol price in Nigeria, the crash of the naira against the dollar and the recent rise in crude oil price is making one apprehensive. This month, fuel prices are most likely to increase once more.

Additionally, oil marketers confirmed that there may be another increase in fuel prices this month.

The increase of fuel prices at our retail outlets will keep rising as long as the naira is falling against the dollar, according to Billy Gillis-Harry, president of the Petroleum Products Retail Outlets Owners Association of Nigeria.

He urged Tinubu to see to it that the refineries in Nigeria were once again put to use.

He claimed that in order to hasten the repairs at our refineries, “We have requested that the President declare a state of emergency.”Because every PMS you purchase at any retail location is currently dollarized, that is the only surefire way to predict the price of petroleum products.

Chinedu Okonkwo, National President of the Independent Petroleum Marketers Association of Nigeria, also commented on the development, stating that the PMS price would continue to fluctuate despite the complete deregulation of the downstream oil industry.

“The increase in fuel prices would increase or decrease if there was deregulation and no subsidy. However, those who import and sell at lower prices would drive you out of business if you wanted to make a profit.

The Federal Government may also step in, according to oil marketers, as both the price of crude oil and the increase in fuel prices have been steadily rising.

President Tinubu had pledged to step in if necessary, according to Mike Osatuyi, National Controller Operations for the Independent Petroleum Marketers Association of Nigeria.

“First and foremost, we must thank President Tinubu for eliminating fuel subsidies, as the nation would have been heavily burdened by this point,” he said.

“We now notice that the amount of fuel they claimed we used to consume had decreased, especially in light of the rising prices of crude oil. The price of crude oil is rising concurrently, which means Nigeria will have more money in addition to the money it has saved by eliminating subsidies. Then, because there is more money in the nation, we must pay as the price of gasoline continues to rise.

According to the depot, the ex-depot price is currently between N585 and N590 per litre, and it will either increase or decrease depending on the price of crude and the exchange rate.

But the president has stated that interventions would be made if necessary. So, we assume they are keeping an eye on the situation as it develops concerning the increase in fuel prices.

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See also e-CRVS: President Tinubu to Launch Digital Vital Statistics System

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Written by Grace Ene

Author for Techrectory.

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