Petroleum marketers have cautioned Nigerians to brace themselves for another potential surge in petrol pump prices.
These warnings arise from the increase in the cost of crude oil and the depreciation of the naira against the US dollar, both of which account for more than 80 percent of the cost of Premium Motor Spirit (PMS).
Brent crude, the global benchmark for oil, reached $94 per barrel on Sunday, September 17, marking the highest figure for 2023.
Although the Federal Government and the Nigerian National Petroleum Corporation (NNPC) have insisted that petrol subsidies have been discontinued, oil marketers argued that the government is still implementing a form of quasi-subsidy.
They emphasized that with the recent surge in crude oil prices, the cost of petrol was expected to rise. Therefore, if the government continues to maintain the current price of N617 per litre, it implies that a form of subsidy on PMS has been quietly reintroduced.
The National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, stated, “In this price deregulation regime, once the dollar increases, automatically it means that the cost of importing petroleum products will also increase, as well as the cost of every other related service.”
Ukadike further explained that while the increase in crude oil prices benefits Nigeria’s dollar earnings from crude oil exports, it has a negative impact because the nation still relies on the dollar to import finished crude products. The disparities between official and parallel market exchange rates are also growing, requiring the government to implement quasi-subsidies on petrol to cover these gaps.
He concluded that for true competition to be established, the government should be transparent in its approach to the subsidy removal and apply it fully.
