Nigerians Express Concern as Naira Falls and Oil Prices Rise, Fueling Apprehensions of Petrol Price Hike
The declining value of the Nigerian naira against the US dollar, accompanied by a recent surge in global crude oil prices, is causing anxiety among Nigerians about a potential increase in the pump price of Premium Motor Spirit (petrol).
While the Nigerian National Petroleum Company Limited and other oil marketers have not officially announced any petrol price hike, they acknowledge that the scarcity of foreign exchange and the rise in crude oil prices are influential factors in determining the price of PMS.
After the removal of subsidy on PMS by President Bola Tinubu, petrol price escalated from N198 per litre in May to over N500 per litre in June. This increased further to above N600 per litre in July, prompting concerns of another potential rise in August due to the naira’s depreciation against the dollar.
The naira’s value dropped below N900 against the dollar at the parallel market, while Brent crude, a global benchmark for oil, traded at around $87 per barrel, compared to less than $80 per barrel just a few weeks ago. Residents, like Collins Nnabude from Abuja, express worry about the impact of the naira’s fall and crude oil price increase on petrol prices, anticipating a potential further rise this month.
Oil marketers also acknowledge the likelihood of another petrol price increase in August, pointing to the naira’s depreciation as a significant factor. Petroleum Products Retail Outlets Owners Association of Nigeria President, Billy Gillis-Harry, urges the utilization of Nigeria’s refineries to mitigate petrol price fluctuations and reliance on the dollar.
Independent Petroleum Marketers Association of Nigeria President, Chinedu Okonkwo, notes the fully deregulated downstream oil sector, highlighting that petrol prices could fluctuate in line with global trends. Oil marketers suggest that the Federal Government might intervene due to the continuous rise in crude oil prices and ex-depot petrol prices. President Tinubu has reportedly promised to intervene if necessary.
The National Controller Operations of the Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, acknowledges the positive aspect of removing fuel subsidies, stating that more funds could be available due to rising crude oil prices. He indicates that the ex-depot price currently ranges from N585 to N590 per litre, emphasizing that the government is observing the situation closely.
Opinion: The increasing apprehension among Nigerians regarding a potential petrol price hike due to the devaluation of the naira and rising global oil prices highlights the interconnectedness of economic factors on everyday lives. Effective government interventions and policy decisions will be crucial to addressing these concerns and ensuring stability in fuel prices. Despite no official announcements, concerns are growing, and oil marketers point to these factors as significant influences on petrol prices.
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