Nigerian marketers have been reportedly planning to hike fuel price over the cost of crude oil and the depreciation of the naira against the US dollar.
The oil marketers stated on Sunday explained that the cost of crude oil and the exchange rate of the dollar accounted for over 80 percent of the cost of PMS.
Brent crude, the global benchmark for oil, rose to $94/barrel on Sunday, the highest figure in 2023. Oil had started the year at about $82/barrel, dipped to $70/barrel in June, but traded above $92/barrel in the past week.
On Thursday, September 14, 2023, the naira depreciated to N950 per dollar following Forex scarcity.
Currency dealers had revealed that the naira closed at N930 to a dollar on Tuesday, September 12, 2023, and later surged to N950 per dollar the following day.
Despite assurances from the Nigerian National Petroleum Company Limited and the Nigerian government that there will not be further increases in petrol prices, marketers insisted on Sunday, September 17, 2023, that the current realities may not be sustainable in the long run.
The marketers explained that with the rise in crude oil prices, the cost of petrol would increase, stating that if the government insists on N617 per litre, there might be a quiet return of subsidy.
According to the marketers, crude oil sold for about $82 per Barrel, while the exchange rate was not as high as it is now at the parallel market.
In August, there were speculations that the Nigerian government may have quietly reintroduced petrol subsidy, an allegation the government denied. President Tinubu had vowed to remove petrol in his inaugural speech on May 29, 2023.
Recall that the NNPC secured a $3 billion oil swap deal with AfreximBank, which the national oil company said would stabilise the Forex market.
The increase was initiated by the newly procured $3 billion loan by NNPC from Afreximbank to stabilise the naira and see Nigeria through the crucibles of the petrol subsidy removal.
The facility was procured via a crude oil agreement signed between Afreximbank and the Nigeria National Petroleum Company Limited (NNPCL).