Oil Marketers Warn of Potential N680-N720/Litre Petrol Price Amidst Forex Fluctuations

Oil marketers have issued a cautionary statement, revealing that the cost of Premium Motor Spirit (petrol) could surge to a range of N680 to N720 per litre in the upcoming weeks if the dollar's trading range continues at N910 to N950 in the parallel market.

The scarcity of foreign exchange has prompted dealers to delay plans for importing PMS, with the Central Bank of Nigeria's official window for forex (which offers a lower exchange rate of about $740/litre) remaining illiquid and unable to meet the importation needs of $25 million to $30 million required by dealers.

This scarcity has led to the suspension of petrol imports by initially eager dealers. Even the sole importer, Emadeb, is struggling to recover its investment due to the depreciation of the naira.

Key figures within major oil dealer organizations, including the Major Oil Marketers Association of Nigeria, Independent Petroleum Marketers Association of Nigeria, and Petroleum Products Retail Outlets Owners Association of Nigeria, have emphasized the urgent need for government intervention to address this crisis.

Chief Chinedu Ukadike, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, highlighted how forex fluctuations impact petrol prices. He stressed that when the naira weakens against the dollar, it directly affects prices due to the demand and supply dynamics of forex. He also noted that forex is critical in various sectors, not just petroleum products.