The recent depreciation of the Nigerian Naira against the US dollar occasioned by the Naira float two months ago by the Central bank of Nigeria (CBN), coupled with the upward trajectory of global crude oil prices, is causing palpable fears and apprehension among Nigerians of a possible increase in the cost of Premium Motor Spirit (PMS), commonly known as petrol.
While the Nigerian National Petroleum Company Limited and other oil marketers have not officially announced any imminent petrol price hike, they have acknowledged that the scarcity of foreign exchange and the surge in crude oil prices are pivotal factors influencing PMS pricing.
Fuel prices rise above 500 per litre in May
In May, petrol prices rose from N198 per litre to over N500 per litre in June after the removal of subsidy on PMS by President Bola Tinubu.
Subsequently, the cost skyrocketed to over N600 per litre in July, prompting concerns of further escalation in August due to the weakening naira.
The naira’s decline below N900 against the dollar, as observed in the parallel market, along with Brent crude oil trading around $87 per barrel (compared to below $80 per barrel a few weeks prior), has heightened apprehension among Nigerians.
Collins Nnabude, an Abuja resident, voiced concerns over the potential impact on petrol prices, stating, “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 concur with the possibility of another petrol price hike this month. Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria, emphasized the need to revitalize Nigeria’s refineries to mitigate price fluctuations.
Chinedu Okonkwo, National President of the Independent Petroleum Marketers Association of Nigeria, highlighted the deregulated state of the downstream oil sector, indicating that petrol prices would continue to fluctuate based on market dynamics.