Why the price of petrol may go up to ₦900/litre - Marketers

Petroleum marketers have projected that the price of fuel may rise to ₦900 following the fluctuations in the naira to dollar exchange rates and the surge in the price of crude in the international market.

Currently, the price of PMS falls between ₦598 and ₦617/litre and oil marketers have said this price falls way below the expected amount of the commodity following the economic changes in the international oil market.

This development has further casted doubts on the FG’s earlier announcement of removal of fuel subsidy as the current pump price has shown the product is still being subsidised by the Federal Government.

A Daily Trust report has given credence to this claim as it revealed the Tinubu-led government paid ₦169.4 billion as subsidy in August to keep the pump price at ₦620 per litre.

According to the report, a document from the Federal Account Allocation Committee (FAAC), showed that the Nigerian Liquefied Natural Gas (NLNG) paid the sum of $275 million as dividends to the FG via Nigerian National Petroleum Company Limited (NNPCL) in August 2023.

Out of the funds remited to the NNPCL, $220 million (₦169.4 billion when exchanged at ₦770/$) out of the $275 million was used to pay for PMS subsidy.

It has been confirmed by some dealers in the downstream oil sector that over 80% of the cost of PMS is linked to the cost of crude and the naira-dollar exchange rate.

At the beginning of the year, the price of crude had started at $82/barrel. It slid down to $70/barrel in June, but in the past weeks, the price has sharply increased as it traded above $94/barrel.

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Why the price of petrol may go up to ₦900/litre - Marketers

Petroleum marketers have projected that the price of fuel may rise to ₦900 following the fluctuations in the naira to dollar exchange rates and the surge in the price of crude in the international market.

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