Independent Petroleum Marketers Association of Nigeria (IPMAN) has proposed new price for the cost of Premium Motor Spirit, popularly known as petrol following unending free fall of naira against dollar.
Oil marketers said the pump price of 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 stated that that dealers seeking to import PMS were being forced to put the plans on hold due to the scarcity of foreign exchange to import the commodity.
The exchange rate of the naira to the United States dollar has continued to witness a free fall since the decision of the administration of President Bola Tinubu to abolish multiple exchange rates in the country, with the naira crossing the N900 to a dollar mark this past week to settle at N950 on Friday.
The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Chinedu Ukadike explained that the price of petrol was now driven by the fluctuations in forex, hence Nigerians should expect a hike soon.
“Once there is a 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.”
According to Ukadike, oil marketers were still sourcing dollars from the parallel market, as the CBN’s Importers and Exporters official window was illiquid.
“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.
Speaking further, the IPMAN PRO also stated that the Nigerian National Petroleum Company Limited was still the major importer of petrol into Nigeria, though another importer, Emadeb, imported the commodity recently.
“NNPC is still the major importer for now. One other company, Emadeb, imported products recently, but because this product is being sold in naira, getting back their funds is another issue since the naira keeps depreciating, while PMS imports is in dollars.
“This is why it is often difficult to go back and buy again as an independent importer. That is the problem we are facing,” Ukadike stated.
Explaining when Nigerians would start seeing the price increase, Ukadike said: “NNPC is like the sole distributor of petroleum products now, so once you see a change in the price of petrol at their outlets, then other marketers will implement it.”