On the illegal market, the Naira to dollar exchange rate fell from 900/dollar on Wednesday to 920/dollar on Thursday, raising more questions about whether the current pump price of petrol could be sold.
Last week, the naira recovered from a two-week low of 945/dollar on the parallel market.
However, the local currency began to fall this week, unsettling economic managers and stakeholders in the oil and gas sector.
On Thursday, oil traders and marketers informed our source that with the currency rate of N920/$, the pump price of petrol could not stay at N617/liter, especially if the current exchange rate remained.
Based on their calculations, they predicted that PMS would cost between N680 and N700 a liter.
based on a Naira to Dollar exchange rate of N920/liter, while keeping in mind that the forex rate was around N750/$ to N800/$ at the time the price of petrol was set at N590/liter to N617/liter.
However, oil marketers pointed out that because the Federal Government insisted on not raising the price of gasoline, it must be “secretly subsidizing the commodity based on the prevalent exchange rate reality.”
According to forecasts and analyses of oil marketers and dealers, the Federal Government may be spending around N90 as a subsidy on gasoline due to the collapse of the local currency against the dollar.
On Thursday, the ex-depot price of petrol was reported to be around N585/liter. Going by the expected cost of N680/liter.
According to the present Naira to Dollar exchange rate, the government may be required to spend N95/liter as a subsidy.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority said last week that the country’s daily gasoline consumption was 52 million liters.
When multiplied by the estimated N95/liter projected subsidy and calculated for a month, this suggests that the government may be obliged to spend around N153 billion on fuel subsidies each month.
Ajuri Ngelale, the Special Adviser to the President on Media and Publicity, informed the State House media last week that President Bola Tinubu has directed that petrol prices not rise.
“Mr President wishes to reassure Nigerians following the NNPC Limited’s declaration yesterday (Monday)
There will be no increase in the price of PMS at the pump anywhere in the country. “We reiterate that the President has stated that there will be no increase in the price of PMS at the pump,” he said.
Last week, NNPCL also stepped out in response to public worry about a likely increase in gasoline pump prices.
“Dear valued customers, we at NNPC Retail appreciate your business and do not intend to raise our PMS pump prices, as has been widely speculated.” “Please purchase the highest quality products at the most competitive prices at our NNPC Retail stations across the country,” the firm stated.
NNPC Retail is NNPCL’s downstream division that sells refined petroleum products to the group.
IPMAN issues a warning.
They stressed again on Thursday that because the naira-dollar depreciation had not abated in the last few days, the price of gasoline would certainly rise regardless of NNPCL and the Presidency’s positions, emphasizing that the only solution was if the government had quietly returned fuel subsidies.
“I still maintain that it has to do with forex because we are still importing petroleum products into this country.” And when it comes to FX, that implies that a lot of naira will be chasing a few dollars.
“And because we don’t have an influx of dollars into Nigeria, the landing cost of gasoline will continue to rise as long as the dollar rises,” the report said. For more News