Naira slump: Price of fuel may increase, marketers say

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

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

After President Bola Tinubu eliminated the subsidy on PMS, the price of petrol increased from N198 per litre in May to above N500 per litre in June.

The cost rose again to over N600 per litre in July, and there were concerns that it might rise further in August, going by the crash of the naira against the dollar.

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

Also 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, a resident of Abuja, said, “The crash of the naira against the dollar and the recent rise in crude oil price is making one apprehensive when you consider the effect on petrol price in Nigeria. Fuel price is likely going to rise again this month.”

Oil marketers also confirmed the possibility of another hike in the price of petrol this month.

Billy Gillis-Harry, the President of Petroleum Products Retail Outlets Owners Association of Nigeria, said, “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 President Tinubu to make sure that Nigeria’s refineries were put back to use.

According to him, “We have requested that the President should declare a state of emergency on our refineries in order to speed up their repairs.

“That is the one sure way to go, in order to be able to predict the price of petroleum products because for now, every PMS you buy in any retail outlet is dollarised.”

Chinedu Okonkwo, the National President of Independent Petroleum Marketers Association of Nigeria, also commented on the development and said the downstream oil sector had been fully deregulated and, the cost of PMS would continue to vary.

“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.”

The Federal Government may also step in, according to oil marketers, as both the price of crude oil and the ex-depot price of petrol have been rising steadily.

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

He said, “First of all, we must thank President Tinubu for removing fuel subsidies because the country would have been in a big burden by now.

“In view of 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 the 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 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.”