The crude oil reaching $93.50 raises concerns and casts a shadow of uncertainty over fuel prices
The ongoing surge in international crude oil prices has triggered concerns of a potential increase in petrol prices in Nigeria.
On Monday, the product was trading at $93.55 per barrel.
This situation unfolds amid the backdrop of the Naira's depreciation in the foreign exchange market, where it was valued at N980/$1 on Monday in the parallel market.
However, the Independent Marketers Association of Nigeria (IPMAN) and the Major Oil Marketers Association of Nigeria have alleviated concerns regarding a potential petrol price hike, despite the increasing global crude oil prices and the Naira's depreciation in the foreign exchange market.
Over the past three months, fuel prices have been raised twice. After the removal of the fuel subsidy in June, the pump price was raised by 210 percent, soaring to N546.83 per litre from its previous rate of N175 per litre. Less than a month later, the fuel pump price further increased to N617 per litre from N546.83.
Despite the persistent decline in the Naira's value in the forex market between July and September, there have been no additional fuel price hikes.
This development follows President Bola Ahmed Tinubu's commitment to the Nigerian populace, as confirmed by Ajuri Ngelale, Special Adviser to the President on Media and Publicity, that there will be no additional increases in the fuel pump price.
"We reiterate that the President is resolute in assuring that there will be no rise in the price of petroleum motor spirit," he affirmed.
Mele Kyari, the Group Chief Executive of the Nigerian National Petroleum Corporation Limited (NNPC), echoed Tinubu's commitment.
NNPC Limited has been the exclusive supplier of fuel across the nation, with the exception of July when Emadeb Energy imported 27 million litres of fuel into Nigeria.
There are also suggestions that the Federal Government is indirectly subsidizing the commodity to prevent further hikes in the pump price.
Chinedu Okonkwo, the President of IPMAN, reassured that there is no need for concern regarding the increase in fuel prices. He emphasized that the Nigerian National Petroleum Corporation Limited (NNPCL) remains the exclusive supplier of petrol nationwide and has not put forward any plans for a price hike.
Okonkwo clarified that fuel marketers acquire their products using the Naira as their currency.
He called upon the federal government to expedite its efforts in implementing Compressed Natural Gas as a viable alternative to traditional fuel.
"We are procuring fuel products from our source, NNPCL Retail. NNPCL has not conveyed any information to us regarding a fuel price adjustment, and therefore, I should refrain from making any speculations about price increases," he stated.
"I believe we rely solely on NNPCL for our product supply. The price is influenced by market dynamics, and if NNPC opts to adjust fuel prices, we, as marketers, will follow suit. At this moment, there's no need for concern. Just as the price can rise, it can also decrease. NNPCL has the flexibility to take actions that ensure its continued operation. Marketers should not be worried about the availability of dollars because they aren't importing PMS. Currently, NNPCL is the sole importer.
The government should involve stakeholders like IPMAN in the Compressed Natural Gas initiative; that's the solution," he stated.
Additionally, Tunji Oyebanji, a former Chairman of MOMAN, elucidated that the country operates in a unique, deregulated fuel market where NNPCL establishes the price as the exclusive supplier. According to him, as long as NNPCL maintains its role as the sole supplier and importer of fuel, the product's price is likely to remain stable, keeping the well-being of Nigerians in mind.
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