Oil marketers in Nigeria have indicated that the cost of Premium Motor Spirit (PMS), otherwise called petrol, would rise to between N680/litre and N720/litre in the coming weeks should the dollar continue to trade from N910 to N950 at the parallel market.
They also hinted that dealers seeking to import the product were being forced to put the plans on hold due to the scarcity of foreign exchange to import the commodity, the Punch reports. They said the CBN Importers and Exporters’ official window for foreign exchange, which boasts of a lower exchange rate of about $740/litre, had remained illiquid and unable to provide the $25m to $30m required for the importation of PMS by dealers.
The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, on Sunday, explained that the price of petrol was now driven by the fluctuations in forex, hence Nigerians should expect a hike soon. “Once there is slack in the naira against the dollar, there is going to be an effect. The demand and supply of forex is a key factor. We should also understand that it is not only petroleum products that use forex.
“Other manufacturers who import one thing or the other are also searching for dollars. So, the surge for dollars has continued to increase. So now that the dollar is hitting N910 to N940, and approaching N1,000, you should expect to buy PMS at the rate of N750/litre.
“It is simple mathematics, once the dollar is going up, have it in mind that the prices of petroleum products would definitely increase because the products are dollar-driven. Nigerians should brace for a price regime of between N680 to N720 if the exchange rate stays around N910 to N950/$, but the price is going to hit N750 once the dollar rises to N1,000. This is because marketers still source dollars from the parallel market, and not only marketers but virtually all importers in Nigeria. There is no subsidy any more on petroleum products, so you expect the cost to fluctuate with the dollars,” he stated.
On when Nigerians would start seeing the price increase, he said, the change will come to effect as soon as NNPC which is the sole distributor of PMS makes the change.
Earlier, the President, PETROAN, Billy Gillis-Harry, while speaking on the matter, had said, “So long as the naira is losing against the dollar, the price of petrol in our retail outlets will continue to increase. To address this, he called on Tinubu to make sure that Nigeria’s refineries were put back to use. “We have requested that the President declare a state of emergency on our refineries to speed up their repairs.
Meanwhile, the CBN last week attributed the continued fall of the naira against the dollar to the diversion of Diaspora remittances to the parallel market.
The CBN Acting Governor, Folashodun Shonubi, spoke while delivering a lecture titled ‘Diaspora Remittances and Nigeria Economic Development’ at the National Institute for Security Studies in Abuja.
Shonubi said a lot of Diaspora remittances arrived in Nigeria in dollars and end up in the parallel market without being officially documented.
Leaders of the Major Oil Marketers Association of Nigeria of Nigeria, Independent Petroleum Marketers Association of Nigeria, and Petroleum Products Retail Outlets Owners Association of Nigeria said there was a need for the Federal Government to intervene to address the crisis.