In a recent statement, petroleum dealers have suggested that the pump price of petrol should be adjusted to fall within the range of N890 to N900 per litre. This recommendation is based on the significant depreciation of the Nigerian Naira against the United States dollar and the surge in crude oil prices in the international market.
The forex crisis, coupled with the recent escalation in crude oil prices, has raised concerns among oil marketers about the sustainability of the current petrol price of N617 per litre. Some have even asserted that the government has quietly reintroduced fuel subsidies.
“The continuous devaluation of the Naira leaves no room for the government to maintain the current petrol price of N617 per litre without incurring subsidies,” said Chief Chinedu Ukadike, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria. He further emphasized, “The parallel market exchange rate currently stands at almost N990 to the US dollar, and its impact on diesel prices is evident, with diesel retailing at nearly N1,000 per litre. Hence, the retail price of Premium Motor Spirit (PMS) should ideally fall within the range of N890 to N900 per litre.”
Ukadike added, “By our calculations, in the United States, gasoline is sold at approximately $3.9, equivalent to around N3,000 per litre. The premium gasoline variant is priced at approximately $2.89, exceeding N2,000 per litre. In comparison to other African countries, where petrol prices range from N1,200 to N1,500, the Nigerian pricing should ideally hover around N900 per litre, considering the prevailing forex rate.”
Sources reveal that the subsidized ex-depot price of petrol sold by the Nigerian National Petroleum Corporation Limited (NNPCL) ranges between N585 and N600 per litre, depending on the region of purchase. By subtracting the ex-depot cost of N600 per litre from the projected unsubsidized rate of N890 per litre, it becomes apparent that the government may currently be subsidizing approximately N290 per litre.
The recommendations put forth by petroleum dealers have ignited discussions about the necessity of government intervention to stabilize petrol prices and alleviate the burden on Nigerian consumers. As the nation grapples with economic challenges, the question of how the government addresses the petrol pricing issue remains a pivotal concern for both citizens and industry stakeholders.
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