Fuel price: As crude oil surpasses $93.50, uncertainty looms

Concerns about a further increase in the price of petrol in Nigeria have grown as a result of the ongoing increase in the price of crude oil on the global market.

According to OBASANJO NEWS24, the commodity sold on Monday for $93.55 a barrel.

The shift coincides with the Naira’s decline at the foreign exchange window, where Monday’s parallel market exchange rate was N980 to $1.

However, due to the growing price of crude oil on the international market and the free-fall of the Naira at the FX window, the Independent Marketers Association of Nigeria, or IPMAN, and the Major Oil Marketers Association of Nigeria have allayed concerns about a potential increase in the price of petrol.

The price of fuel has increased twice in the last three months, according to OBASANJO NEWS24.

The pump price was revised upward by 200% to N546.83 per litre from N175/per litre in June after the gasoline subsidy was eliminated. The price of petrol at the pump was raised from N546.83 to N617 per litre less than a month later.

Despite the steady decline in the value of the Naira on the foreign market between July and September, there was no impact on fuel increments.

According to Ajuri Ngelale, the president’s special adviser on media and publicity, the development is in response to President Bola Ahmed Tinubu’s commitment to Nigerians that there won’t be any additional increases in petrol pump prices.

The President reiterates that there won’t be a price hike for petroleum motor spirit, he stated.

Tinubu’s assurance was echoed by Mele Kyari, Group Chief Executive of Nigerian National Petroleum Corporation Limited.

NNPC limited has been the only distributor of the good nationally, with the exception of July, when Emadeb Energy imported 27 million litres of fuel into Nigeria.

There are also allegations that, in order to prevent a further increase in the pump price, the federal government was subsidising the good inadvertently.

The President of IPMAN, Chinedu Okonkwo, stated exclusively to OBASANJO NEWS24 on Monday that there is no need for concern regarding the increase in fuel prices.

The Nigerian National Petroleum Corporation Limited, he claimed, is the only source of petrol in the entire country and has not put up an increase strategy.

Okonkwo clarified that fuel distributors buy their goods in naira.

He asked the federal government to expedite measures to ensure that compressed natural gas is adopted as a practical fuel substitute.

Fuel goods come from our supplier, NNPCL Retail. I shouldn’t make any assumptions about price increases because NNPCL has not informed us that the price of fuel would change.

“I believe NNPCL is the only company that supplies us with goods. The price is determined by market fundamentals; if NNPC decides to raise the gasoline pump, we will also alter.

There is nothing to be concerned about right now. The price may decrease for the same reason it may increase. Whatever it takes, NNPCL will do to stay in business. Since they are not importing PMS, no marketer should be able to complain about a lack of dollars. Currently, NNPCL is the only importer.

The solution, according to him, is for the government to involve stakeholders like IPMAN in the compressed natural gas effort.

Additionally, Tunji Oyebanji, a former chairman of MOMAN, said that NNPCL, the country’s sole supplier, determines the price in a unique, unregulated market for fuel.

In his opinion, the price of the good may likely stay the same in the interest of the majority of Nigerians so long as NNPCL continues to be the country’s sole supplier and importer of fuel.

Because only the NNPCL imports fuel into Nigeria, we find ourselves in an odd scenario operating in a deregulated market.

“If I wish to import, the landing cost can be more expensive than the going rate. Therefore, at this time, only NNPCL may import.

Since they are the only importers, it follows that they indirectly control the market’s price.

They are both a retailer and a supplier to the entire market. Therefore, the price of NNPCL will reflect what the domestic market is saying at the moment.

“Since there is only one supplier in the market where we operate, that supplier will set the price for the good. If fuel importers other than NNPCL enter the supply chain market, prices could rise, he warned.