INDUSTRY analysts have given reasons why petrol prices will keep rising, as the Nigerian National Petroleum Company Limited (NNPCL) Tuesday jacked up pump price from the least price of N492 per litre to N617.
Analysts believe the price will continue to rise till the naira attains measurable stability against the dollar.
President Bola Ahmed Tinubu’s foreign exchange unification policy has put the local currency under intense volatility.
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“The removal of fuel subsidy was the right decision; the alternative was the Federal government defaulting on its debts. Hopefully, Dangote can undercut the marketers and force them to stop importing when he starts production and supply later in the year. This would affect the price. But for now, exchange rate volatility will still affect price of importation,” an economist, Kelvin Emmanuel, told The ICIR.
The price hike comes barely 48 days after President Tinubu declared an end to subsidy on petroleum import, and barely a month after Nigeria’s inflation increased for the sixth consecutive time to 22.79 per cent, as announced yesterday, July 17, by the National Bureau of Statistics (NBS).
Analysts are certain the fuel price hike and increase in the inflation rate will further squeeze households harder and compound poverty levels.
Following the new price announcement, queues immediately sprang up at NNPCL filling stations in Abuja as attendants moved to adjust fuel pumps to reflect the new price.
The NNPCL at Murtala Muhammed expressway, Kado, was shut against consumers for a couple of hours.
There has been no official communication by the official spokesperson of the NNPCL, Garba Deen Mohammed, on the reasons for the price hike.
He did not respond to The ICIR calls on the matter when contacted.
President of the Petroleum Retail Owners Association of Nigeria (PETROAN), Billy-Gilly Harry, told The ICIR that the NNPCLtd did not consult other petroleum marketers before increasing the price.
“NNPL still has an edge over other marketers but shouldn’t have adjusted the price without reaching out to other stakeholders,” Harry said.
The PETROAN chief, noting that the national oil company had only 300 filling stations while PETROAN members had 18,930 filling stations across the country, added, “They changed price to N617 without consulting us. This is completely wrong. We are all competitors, but NNPCL is a super partner. They have the assets, and they still wield the powers they had when they were fully in government. This is not fair competition, but we will get to compete with them.”
Harry disclosed that the association had been reaching out to its members to invest in their own modular refinery.
“We have already got partners,” he said.
The National Operations Controller of the Independent Marketers Association of Nigeria (IPMAN), Mike Osatuyi, said he had projected sometime ago that an upward review in fuel pump price should be expected from the third week of July 2023 when new imports of the product arrive.
Osatuyi attributed the rise to an increase in crude oil prices at the international market, foreign exchange unification and higher logistics – including transportation – costs.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.