"Too Cheap": Another Fuel Price Increase Looms as Naira Sells Above N920/$, Oil Marketers Propose New Cost
- Nigerians could pay more for fuel in the coming days if the federal government decides to heed to calls from marketers
- For now, the administration of President Bola Tinubu has assured that there will be no increase in pump prices
- However, with the naira depreciating to as low as N900 to a dollar and crude oil prices hovering above $80 per barrel, a change could be imminent
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Despite President Bola Tinubu's recent assurances that current petrol price will remain unchanged, oil marketers indicate that this might change in the near future.
This is as a result of the Naira is now trading between N900 and N920 against the US dollar.
Source: Getty Images
Legit.ng reported that the special adviser to the President on Media and Publicity, Ajuri Ngelale, revealed that President Bola Tinubu had instructed that the cost of petrol remain the same.
“Mr President wishes to assure Nigerians following the announcement by the NNPC Limited just yesterday (Monday) that there will be no increase in the pump price of PMS anywhere in the country.
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"We repeat, the President affirms that there will be no increase in the pump price of PMS."
However, Punch reports that some oil marketers are clamouring for an increase in the pump price of petrol.
They claimed that the current petrol price of N580 and over N600 per litre is too cheap and does not reflect the current exchange rate and global crude oil price currently above $80 per barrel.
Naira to dollar exchange rate
Data from FMDQ securities shows that the naira against the dollar closed at N771.69/$1 at the official market on Thursday, August 25, 2023.
However, at the black market, the naira was sold between N900 and N920 against the US dollar on Thursday.
While in the Peer-to-Peer (P2P) window, the domestic currency closed against the US Dollar at N911/$1.
Oil marketers explain why fuel prices increase
The oil marketers expressed concerns that the current petrol prices only reflect the forex rate of about N750/$ to N800/$.
With the exchange rate now above N900/$, the marketers are projecting a cost of N680/litre to N700/litre for petrol.
They further argued that the current price is unsustainable, with global crude oil prices above $80 per barrel and Nigeria being import-dependent.
Do not panic, IPMAN tells Nigerians
Despite the clamour for a price change, Chinedu Okoronkwo, the President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), in a telephone interview with Legit.ng reassured Nigerians not to panic.
"Nigerians are aware that there is no more subsidy, and we have gotten into a new regime where the market fundamentals are the ones playing the major role.
"As long as the dollar keeps rising in the foreign exchange market, the price of fuel in the country will continue to skyrocket.
"It is, however, important to understand that the price will go up and down, there are no longer fixed prices it could be more than N600 or less than N600."
CBN announces dollar to naira price verification portal
Meanwhile, in a similar development, President Tinubu is expecting Compressed Natural Gas (CNG) to sell at N250 per litre and wants Nigerians to prepare.
Nigerians are paying between N580 to N640 per litre for Premium Motor Spirits (PMS), popularly known as petrol.
The federal government also encourages citizens to convert their petrol-powered vehicles to gas-powered ones.
Source: Legit.ng
