The fall of the naira against the United States dollar, coupled with the recent rise in global crude oil prices, is making Nigerians apprehensive of a possible hike in the pump price of Premium Motor Spirit, popularly called petrol.
Although the Nigerian National Petroleum Company Limited and other oil marketers have not announced any increase in petrol price, they confirmed that the scarcity of foreign exchange and crude oil price rise were key factors that determined PMS price.
Petrol price moved up from N198/litre in May to over N500/litre in June after President Bola Tinubu removed subsidy on PMS.
The cost jumped again to over N600/litre in July, and there were concerns that it might rise further in August, going by the crash of the naira against the dollar.
The naira dropped below N900 against the dollar on Thursday at the parallel market. It also fell against the US dollar at the official Importers and Exporters forex window.
Also on Thursday, Brent, the global benchmark for crude oil, was traded at about $87/barrel. It traded for less than $80/barrel few weeks ago.
A resident of Abuja, Collins Nnabude, stated, “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 petrol price this month.
The President, Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, 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 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.”
Also speaking on the development, the National President, Independent Petroleum Marketers Association of Nigeria, Chinedu Okonkwo, said the downstream oil sector had been fully deregulated and, the cost of PMS would continue to fluctuate.
“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.”
Also, oil marketers said, the Federal Government may likely intervene as crude oil price and ex-depot price of petrol had kept rising.
The National Controller Operations, the Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, told The PUNCH on Thursday that President Tinubu had promised to intervene, if necessary.
He said, “First of all, we must thank President Tinubu for removing fuel subsidies because the country would have been in 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 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 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.”