Latest News On Petrol New Price Prediction From July, 2023

Petrol Prices Expected to Surge to N700 per Litre in Northern Nigeria from July, Marketers Project

Oil marketers have predicted a substantial increase in the pump price of petrol in Northern Nigeria, with prices potentially soaring above N700 per litre starting from July. According to the National Controller Operations of the Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, the rise in prices is anticipated once independent marketers commence importing petroleum products in the region.

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Osatuyi explained that residents in the northern states could face prices as high as N700 or more for a litre of petrol, while those outside Lagos should expect to pay around N610 per litre. Lagos residents, on the other hand, are likely to pay approximately N600 per litre. These projected prices are subject to fluctuations in the exchange rate, crude oil prices on the international market, and the landing cost of the imported products.

The downstream sector is currently awaiting fresh petroleum products as the Nigerian Midstream and Downstream Petroleum Regulatory Authority continues to grant licenses to operators interested in the importation business. The Executive Secretary of the Depot and Petroleum Products Marketers Association of Nigeria, Olufemi Adewole, confirmed that the regulatory authority is in the process of licensing more importers. He emphasized that product prices would depend on market fundamentals.

Adewole pointed out that neighboring countries like Ghana, Benin, and Cameroon rely on imports from Nigeria. He highlighted the issue of product smuggling from Nigeria to these countries. He further explained that any additional costs incurred by marketers, such as the 7.5% Value Added Tax (VAT) imposed by the Nigeria Customs Service on the importation of Automotive Gas Oil (diesel), would be added to the landing cost and eventually reflected in the pump price. Marketers also factor in their profit margins, which contribute to the overall price increase.

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Tunji Oyebanji, a former chairman of the Major Oil Marketers Association of Nigeria, and CEO/Chairman of 11 Plc, stated that consumers should expect new pump prices similar to those of diesel and neighboring African countries that also import petrol. As of June 19, the price of one litre of petrol in Ghana, Cameroon, and Benin was already above N800 per litre. Presently, petrol sells for around N495 and above in Nigeria, while the price of diesel is approaching N800 per litre.

Oyebanji acknowledged the possibility of price reductions depending on the exchange rate. He emphasized that with increased product availability and competition among filling stations, prices would adjust to attract customers. He also mentioned that depot owners are exploring options such as local and foreign loans to finance importation.

The Federal Government’s decision to deregulate the downstream market since May 29 has led to a significant increase in petrol prices above N490 per litre at stations belonging to the Major Oil Marketers Association of Nigeria, and above N500 at IPMAN stations across the country. Currently, marketers are still loading products at the government-regulated price of N496.50 per litre. However, the recent forex policy of the central bank, which has caused the naira to appreciate to around N765/$1, may impact business operations until new products arrive.

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The move towards deregulation has affected neighboring countries, as black market fuel vendors and commercial drivers in Cameroon, Benin, and Togo have witnessed business disruptions due to low supplies and high prices. Official petrol stations in Benin and Togo have experienced increased demand, while contraband fuel vendors have lost both supplies and customers.

Critics, including energy expert Bala Zaka and Professor of Economics Tella Sheriffdeen, have expressed concerns over the impact of deregulation on Nigeria’s economy and the welfare of its citizens. They advocate for government intervention, emphasizing the need to prioritize local refining to ensure fuel availability at reasonable prices.

As the government prepares to unveil its roadmap following discussions with labor unions, the fate of petrol prices in Nigeria remains uncertain. The coming months will determine the true extent of the price adjustments and their implications for the Nigerian population.

Source: The Punch

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