Oil marketers in Nigeria have warned that the combination of increasing crude oil prices and the depreciation of the naira against the US dollar may result in a surge in the pump price of Premium Motor Spirit (PMS), commonly known as petrol. They revealed that the cost of crude oil and the exchange rate of the dollar make up over 80% of the price of PMS.
Brent crude, the global oil benchmark, recently reached $94 per barrel, the highest price in 2023. Additionally, the naira weakened against the dollar, trading at N950/$ in the parallel market, exacerbating concerns.
Although the Nigerian government and the Nigerian National Petroleum Corporation (NNPC) declared that the subsidy on petrol had been removed due to the deregulation of the downstream oil sector, oil industry operators argue that the government is quietly implementing a quasi-subsidy. They suggest that the rising crude oil price should lead to an increase in petrol prices and that if the government keeps petrol at N617 per litre, it effectively brings back the subsidy.
Oil marketers contend that the gap between costs and selling prices is widening, and the government must be transparent about its subsidy removal policy. Furthermore, they call for a genuine deregulation of petrol prices to align with market forces and prevent further subsidy reinstatement.
However, the government has publicly stated that there will be no increase in petrol prices despite the challenges posed by rising crude prices and forex issues
Brent crude, the global oil benchmark, recently reached $94 per barrel, the highest price in 2023. Additionally, the naira weakened against the dollar, trading at N950/$ in the parallel market, exacerbating concerns.
Although the Nigerian government and the Nigerian National Petroleum Corporation (NNPC) declared that the subsidy on petrol had been removed due to the deregulation of the downstream oil sector, oil industry operators argue that the government is quietly implementing a quasi-subsidy. They suggest that the rising crude oil price should lead to an increase in petrol prices and that if the government keeps petrol at N617 per litre, it effectively brings back the subsidy.
Oil marketers contend that the gap between costs and selling prices is widening, and the government must be transparent about its subsidy removal policy. Furthermore, they call for a genuine deregulation of petrol prices to align with market forces and prevent further subsidy reinstatement.
However, the government has publicly stated that there will be no increase in petrol prices despite the challenges posed by rising crude prices and forex issues
