The Nigerian National Petroleum Company Limited (NNPCL) yesterday announced a new fuel price of N617 per litre as against the initial N500 and the Independent Marketers Association of Nigeria (IPMAN) has explained the reason for this current increase.
According to IPMAN’s national president, Elder Chinedu Okoronkwo, “the unexpected increase in petrol’s retail price is due to the escalating value of the US dollar”.
He clarified that the importation of petroleum products into Nigeria relies on the utilization of dollars, and the more Naira/Dollar exchange rate goes up, the more all dollar-purchasing commodities (including petrol) are expected to go up.
“The transactions involving this industry are conducted exclusively in dollars. Currently, the dollar stands at approximately N800, and in a deregulated system, the price of commodities is determined by their respective costs. Considering that our nation relies on imports for petroleum refining, it becomes evident that every aspect of the process incurs additional expenses,” Okoronkwo clarified.
Going by this, the price of petrol is expected to fall only if naira gains in the foreign exchange market or if Nigeria stops importing fuel, perhaps, by refining its own fuel.