Oil industry experts have indicated that should the exchange rate remain within the range of N910 to N950 at the parallel market, we can expect the price of Premium Motor Spirit (commonly known as petrol) to increase to approximately N680/litre to N720/litre in the upcoming weeks.

They also suggested that dealers looking to import PMS were being compelled to delay their plans due to the scarcity of foreign exchange required for importing the product.

This caution was issued shortly after the local currency surpassed the N900/dollar mark, with the naira reaching over 945/dollar on the parallel market last Friday.

Oil dealers explained that the CBN’s Importers and Exporters official exchange window, which offers a lower rate of around $740/litre, remained illiquid and couldn’t provide the $25 million to $30 million necessary for PMS importation.

As a result, petrol importation by dealers, who were initially eager to bring in the product, had to be put on hold.

Senior officials from major oil dealers noted that a hike in PMS price was likely unless the local currency strengthens in the upcoming weeks.

The leaders of key industry associations like the Major Oil Marketers Association of Nigeria, Independent Petroleum Marketers Association of Nigeria, and Petroleum Products Retail Outlets Owners Association of Nigeria emphasized the necessity for the Federal Government to intervene and address the crisis.

Chinedu Ukadike, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, explained in an interview with Punch that petrol prices were now influenced by forex fluctuations.

Consequently, Nigerians should anticipate an impending increase.

When asked about the potential for a petrol price hike, he replied, “If there’s a weakening of the naira against the dollar, there will be an impact.

The supply and demand of forex play a crucial role. Moreover, it’s important to recognize that petroleum products aren’t the only items using forex.”

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By Chinedu

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