Nigerian Oil Traders Sound Alarm Over Potential Fuel Price Surge

Oil traders operating in Nigeria are cautioning about an impending hike in petrol costs, driven by an ongoing foreign exchange dilemma. The anticipated escalation could see petrol prices skyrocket to around 720 naira per liter ($0.93; £0.73), a significant jump from the current mean of $0.77. If this projection materializes, it would mark the third substantial price elevation since President Bola Tinubu assumed office in May.

The consistent depreciation of the naira in the foreign exchange market following the government’s decision to consolidate exchange rates has exacerbated the situation. Presently, the local currency is scaling new heights, trading at an unprecedented range of 910-945 naira against the US dollar in the parallel market.

The Independent Petroleum Marketers Association of Nigeria (Ipman) is expressing apprehension that fuel prices may persistently surge as long as the dollar gains strength in the foreign exchange arena. The oil traders further highlighted the plight of numerous dealers who have been compelled to shelve their import plans due to a scarcity of foreign exchange.

Chinedu Okoronkwo, the president of the association, elucidated that “with the withdrawal of fuel subsidies, pump prices are no longer being regulated by the government but are instead determined by market forces.”

In addition to the foreign exchange predicament, the expenditure linked to ferrying petroleum commodities from depots in Lagos to other regions within the nation is also contributing to the surge in petrol prices. This situation has coerced oil marketers to vend fuel at elevated rates, especially affecting consumers in northern Nigeria.

The populace of Nigeria is grappling with mounting expenses for essential items such as food and transportation, set against a backdrop of high inflation rates and a severe cost of living crisis.