Fuel Price To Rise, Petrol Marketers Warn As Crude Oil Hits $94

Nigerians have been warned by oil marketers to anticipate additional increases in the price of fuel at the pump.

The oil marketers noted that this is because the price of crude oil has increased and because the value of the naira has decreased relative to the US dollar. Together, these two factors account for more than 80% of the price of PMS.

On September 17, the price of Brent crude, the world’s standard for oil, increased to $94 a barrel, the highest level since 2023.

Oil started the year at around $82/barrel, fell below $70/barrel in June, but has recently traded above $92/barrel.

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Oil marketers claimed on Sunday that the government was administering a quasi-subsidy even though the Federal Government and the NNPC had declared that the subsidy on fuel was terminated.

They emphasized that if the government insists on keeping the product at N617/litre, then subsidy on PMS has been quietly restored. They noted that with the most recent increase in crude oil price, the cost of gasoline was expected to climb.

The National Public Relations Officer of, the Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, in a statement on Sunday, said, “The Group Chief Executive Officer of NNPC, in one of his statements, had pointed out that as long as the dollar continues to rise, Nigerians should not expect petroleum products prices to be pegged.

“The cost of crude oil is also on the rise and it impacts on petrol prices because PMS is derived from crude.

“So in this price deregulation regime, once the dollar increases, automatically it means that the cost of importing petroleum products will also increase. And the cost of every other related service will rise.

“So the fuel we are buying today at N617 or N596 depending on where you buy it and based on the nearness to depots is actually below what the price should be, going by the rise in the dollar and crude oil price.

“I said earlier that what we are experiencing now is quasi-deregulation. The rise in crude oil prices has both positive and negative effects on Nigeria. It is positive because it increases our generation of dollars when we sell the crude.

“But it is negative in the sense that we still use that dollar that we have got to import the finished products of crude. That is the problem. If Nigeria is refining products, then there will be a windfall, but since we import with the dollar that we make, then it makes no sense.

“The gap is becoming too much. Also, the exchange rate gap between the official and parallel markets is widening. And these gaps have to be filled by the government through quasi-subsidy on petrol.

“You also know that most of the investors who tried to import products when it was announced that the subsidy on petrol had been removed are now finding it very difficult to do so.

“This is because after buying the dollar in the parallel market, they cannot recoup what they have invested. So the government must be transparent with this subsidy removal thing. It should apply it to the fullest, so that competition can set it.”