Oil marketers mull N750/litre fuel price amid forex crisis

*Stop importation of products In the wake of a deepening forex crisis, oil marketers have signaled a potential surge in the cost of Premium Motor Spirit (PMS), commonly known as petrol, projecting prices between N680/litre and N720/litre in the near future. The escalation hinges on the prevailing exchange rate, which oscillates between N910 and N950 for a US dollar in the parallel market. Market insiders have also disclosed that the scarcity of foreign exchange has prompted prospective PMS importers to shelve their plans temporarily. This revelation emerges shortly after the local currency surpassed the N900/dollar benchmark, with the naira trading at over 945/dollar in the parallel market on Friday. The forex dilemma has significantly impacted the availability of foreign exchange through the Central Bank of Nigeria’s (CBN) Importers and Exporters official window, which offers a more favorable exchange rate of approximately $740/litre. However, the window remains insufficiently liquid to accommodate the $25 million to $30 million required for PMS imports by dealers. As a result, the shortage has forced dealers who were initially eager to import petrol to suspend their plans. Leaders of notable organizations such as the Major Oil Marketers Association of Nigeria, Independent Petroleum Marketers Association of Nigeria, and Petroleum Products Retail Outlets Owners Association of Nigeria have underscored the need for Federal Government intervention to address the mounting crisis. Chief Chinedu Ukadike, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, highlighted that petrol prices now closely follow forex fluctuations, thus foreshadowing an impending price hike. Ukadike pointed out that the demand and supply of forex significantly impact petrol costs, and this situation extends beyond petroleum products, affecting other import-dependent industries as well. He indicated that with the dollar’s upward trajectory to N910 to N940, and potentially nearing N1,000, consumers should anticipate a PMS prices of about N750/litre. Ukadike emphasized that since many importers, including oil marketers, rely on the parallel market for dollar sourcing, the price increase is a direct result of dollar strength. While the Nigerian National Petroleum Company Limited remains the primary petrol importer in the country, independent importer Emadeb recently entered the market. However, Ukadike noted that the depreciation of the naira creates challenges for importers when trying to recover funds from sales conducted in the local currency. He projected that once NNPC adjusts its petrol prices, other marketers are likely to follow suit. The nation’s growing forex predicament continues to cast uncertainty on fuel prices and availability.