Abuja, August 13, 2023 – The Independent Petroleum Marketers Association of Nigeria (IPMAN) has recently shed light on the potential factors that could contribute to a significant increase in the pump price of Premium Motor Spirit (PMS), commonly referred to as petrol. As economic concerns loom and the nation faces currency depreciation, IPMAN has urged the government to adopt policies to safeguard the value of the naira.
Chinedu Ukadike, the National spokesperson of IPMAN, disclosed these insights during a press conference held in Abuja on Thursday. Despite the Nigerian National Petroleum Company Limited (NNPCL) maintaining an ex-depot price of N587.7, Ukadike projected that the prevailing economic conditions could result in a notable rise of approximately 10 percent in petrol prices.
Ukadike elaborated, “The dollar, which was previously valued at N750, has now surged beyond N900. This surge represents an alarming increase of nearly 20%. Applying this calculation, we could potentially witness petrol prices reaching as high as N750 per litre.”
The spokesperson went on to emphasize the role of the parallel market in influencing the cost of petrol. Presently, the dollar exchange rate at the parallel market stands at N910, further exacerbating the potential escalation in the landing cost and ultimately the domestic price of PMS.
The absence of government subsidies and the dearth of local petrol production in Nigeria have compounded the situation, leaving the nation vulnerable to external economic fluctuations. Ukadike lamented the absence of a domestic production buffer, which could have mitigated the impact of the excessive demand for dollars.
“Regrettably, the government’s subsidization of petrol has ceased, and the absence of local production compounds the challenges. If local production were in place, it would have acted as a cushion against the adverse effects of the soaring naira-to-dollar ratio. This absence is acutely felt as we grapple with the burden of too many naira chasing a weakening dollar,” Ukadike explained.
He issued a stark warning that if the government does not take prompt and effective measures, the naira could potentially spiral to the alarming rate of N1,100 per dollar by the year’s end. Such a development could trigger severe inflationary pressures and instability within Nigeria’s economy.
As Nigerians brace themselves for potential fuel price hikes, the government faces the imperative task of devising strategies to stabilize the currency and stimulate local production. Addressing these challenges is vital to preempt the adverse consequences of inflation and to foster the overall economic well-being of the nation.
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