Nigeria’s oil marketers have asserted that the current petrol prices in the country do not accurately reflect the market reality and are projecting yet another price review this month. This comes less than two months after the price of petrol was increased from N189 per litre to N500. The situation has sparked outrage from the public, leading to criticism from various quarters.
Recently, some filling stations operated by the Nigerian National Petroleum Corporation (NNPC) increased their pump prices of petrol from N537 per litre to N617 per litre across the country. This development has further exacerbated the already strained situation for consumers and businesses.
Tunji Oyebanji, a former Chairman of the Major Oil Marketers Association of Nigeria and CEO of 11 Plc, expressed his concerns in an interview with The PUNCH, stating that oil prices should reflect the current market realities as seen in neighboring African countries that import petrol. He highlighted that the price of petrol in Nigeria is significantly lower than that in Mali, Ivory Coast, Cameroon, Ghana, Togo, and Benin.
Mike Osatuyi, the National Controller of Operations, corroborated Oyebanji’s statements, warning that the price of petrol could likely increase to N600/N700 and above starting in July. He attributed this possible surge to factors such as the exchange rate, international crude prices, and landing costs.
Oyebanji also stressed the importance of competition in the downstream sector, as it encourages fair play and allows customers to benefit from more reasonable prices. However, he warned that if market forces are not allowed to control the market, smuggling or diversion of products to neighboring countries may return, as it did in the past.
On the matter of product availability, Osatuyi mentioned that the Federal Government is expected to present a roadmap following its meeting with labor. The roadmap is likely to address issues related to subsidy removal and the use of Compressed Natural Gas. He further hinted that some companies have already been licensed to import petroleum products from July onwards.
Despite the possible drop in global oil prices, Nigeria may not experience a reduction in petrol prices due to the recent devaluation of the naira. The Central Bank allowed the local currency to drop significantly, leading to increased prices and affecting the cost of importation, including petrol.
Energy experts and economists have criticized the government’s decision to deregulate the downstream sector, citing the weakness of Nigeria’s economy and the potential adverse effects on the well-being of citizens. They emphasized the need to focus on local refining and domestic productivity to ensure fuel availability.
As the situation remains uncertain, consumers and businesses brace for further potential price increases and the impacts on daily life and economic activities. The government faces the challenge of striking a balance between market forces and ensuring affordable fuel for its citizens.