Fuel Marketers Insist on Price Increment as Naira Depreciates Further – See New Exchange Rate and Fuel Price
The Nigerian currency, the naira, has recently experienced a notable decline, reaching its lowest point with exchange rates fluctuating between ₦900 and ₦945 per US dollar. This downward spiral has raised concerns among petroleum traders who are now contemplating the possibility of raising fuel prices due to the prolonged weakening of the naira against the dollar.
Prior to the removal of subsidies, oil marketers had voiced their frustrations over the challenge of obtaining dollars for fuel imports, as the responsibility for fuel importation rested solely with the Nigerian National Petroleum Company Limited (NNPCL).
To secure the necessary funds for importing fuel, oil dealers had initially pinned their hopes on utilizing the Central Bank of Nigeria’s Importers and Exporters (I&E) official window for foreign exchange. This platform promised a more favorable exchange rate of approximately $740 per dollar.
However, these dealers have since reported that the I&E window has proven insufficient to meet the required amount for importing Premium Motor Spirit (PMS), commonly known as petrol.
Anticipating the consequences of an unstable exchange rate where the dollar maintains a range of ₦910 to ₦950 on the parallel market, industry experts have projected a potential increase in the cost of PMS. This rise could see prices ranging between ₦680 and ₦720 per liter in the weeks ahead.
This prediction is grounded in the understanding that a continuous depreciation of the naira against the dollar would further escalate the cost of fuel imports, consequently driving up the ex-depot price and subsequently the pump price.
Chief Chinedu Ukadike, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), emphasized the connection between the foreign exchange market and the pricing of petroleum products. He noted, “Since we are still importing petroleum products into this country, it has to do with forex. And once it has to do with forex, it means that so much naira will be chasing a few dollars. And since we don’t have the influx of dollars into Nigeria, the after effect is that the landing cost of petrol will continue to increase as long as the dollar continues to rise.”
Contrary to these concerns, the presidency has maintained a stance against fuel price hikes. The presidential spokesperson, Ajuri Ngelale, reiterated that President Buhari assures Nigerians that there will be no increase in the pump price of PMS, countering speculations sparked by NNPC Limited’s announcement.