Naira falls to 920 Per Dollar, Fuel marketers seek new price increase. 

Following a further decline in the value of the naira versus the US dollar, oil marketers insisted on a potential increase in the price of gasoline at the pump on Thursday.

Concerns about whether the price of gas at the pump could remain the same increased when the local currency declined against the dollar on the black market from 900 to 920 on Thursday.

About two weeks ago, the naira reached 945 to the dollar in the black market. Last week, it recovered.

The local currency started moving southward this week nonetheless, which has concerned economic managers and oil and gas industry stakeholders.

Oil marketers and dealers told The PUNCH on Thursday that the pump price of petrol could not remain at N617/litre with the exchange rate at N920/$, especially if the current exchange rate persisted.

They stated that the currency rate was approximately N750/$ to N800/$ at the time the cost of petrol was set at N590/litre to N617/litre, and they again estimated a cost of between N680/litre and N700/litre for PMS, based on an exchange rate of N920/litre.

However, the oil marketers argued that since the Federal Government had vowed not to raise the price of fuel, it was thus “subsidising the commodity secretly, based on the prevalent exchange rate reality.”

According to the predictions and analysis of oil marketers and dealers, the Federal Government may thus be subsidising petrol by around N90 due to the collapse of the local currency against the US dollar.

On Thursday, it was reported that the ex-depot price of petrol was approximately N585 per litre. According to the predicted price of N680 per litre and the current exchange rate, the government may be required to pay around N95 per litre in subsidies.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority said last week that the country’s average daily fuel usage was 52 million litres.

When this is multiplied by the estimated N95/litre projected subsidy and calculated for a month, it implies that the government could be forced to spend about N153bn as fuel subsidies monthly.

The Special Adviser to the President on Media and Publicity, Ajuri Ngelale, had told State House correspondents last week that President Bola Tinubu had instructed that the cost of petrol should not increase.

“Mr. President wishes to assure Nigerians following the announcement by the NNPC Limited just yesterday (Monday) that there will be no increase in the pump price of PMS anywhere in the country. We repeat, the President affirms that there will be no increase in the pump price of PMS,” he said