A few weeks after the Independent Petroleum Marketers Association of Nigeria (IPMAN) debunked the news of increasing pump price to 700/liters, the federal government-owned NNPC Limited has yet again jerked up its petro pump price from N537 to N617 on Tuesday in the nation capital. It is said that each operator is allowed to change price based on its cost elements, under the present deregulation. It also showed that the dwindling value of the Naira has put pressure on fuel importers, including the NNPC Limited as well as major and independent marketers. Reports have it that many motorists and others have rushed to buy petrol as the price hike begins to spread to other cities, including Lagos and environs, where some filling stations have adjusted their pumps to over N600 per liter.
Commenting on the latest development IPMAN National President Chinedu Okonkwo revealed the spike in dollars as the sudden rise in the pump price of petroleum products in Nigeria, he advised the use of Compressed Natural Gas, CNG, as an alternative to petrol.
According to Okoronkwo: “This business is done with dollars, remember the rate of dollars now is in one window and not like we had several others, where CBN will give around N400 while the black market will be around the region of N700 but now there is no more second window.
“Today the dollar is around N800 and in a deregulated regime, what determines the price of anything is the cost. The product is not refined here, everything is imported. “If we want to achieve something, there are other alternatives we have proffered. The CNG is something this nation needs to seriously look into; so it would be a matter of choice if you want to use gas or petrol.“The price has really gone up because of the fundamentals in the market which has to do with the dollars.”
Moreso, the national operations controller, of IPMAN, Mike Osatuyi, said: “It is not about the NNPC Limited. It is about the market fundamentals. Every marketer stands alone with its different cost elements. The low value of the Naira is currently impacting the market. It is now more than N800 to a dollar.
“This is why the market is responding this way. It has to spread because as operators, our price depends on our cost. “Even though some importers have been able to import the product, it cannot be cheap because it is based on the current market fundamentals, especially foreign exchange. The public should also know that importers source their foreign exchange from the banks at the current rate. “
This double increment is coming less than 2 months after President Bola Tinubu announced the removal of fuel subsidy during his inaugural speech on 29th May 2023.
Following the announcement, the Nigerian National Petroleum Company Limited (NNPCL) directed its outlets nationwide to sell fuel between N480 and N570 per litre, an almost 200 percent increase from the initial price below N200.
The hike immediately triggered an increase in transportation fares and prices of goods and services by various percentages.
