The price of Premium Motor Spirit (PMS) popularly known as petrol has risen amid the continued decline of the naira and growing inflation in the country.
Nigerians woke up on Tuesday to realise that the price of petrol had been adjusted at fuel stations across the country, including those of the Nigeria National Petroleum Company Limited (NNPCL).
In Lagos, the NNPC sold the product for N565 while some other stations sold higher. Prior to the increase, they sold at N484 to N488.
In announcing the deregulation of the downstream petroleum sub-sector, the Federal Government had said the decision became imperative in the face of extreme difficulties being faced by petroleum product importers in sourcing foreign exchange, adding that importers would henceforth be permitted to source for their forex requirements from secondary sources.
Interpreting secondary sources as the parallel market, an analyst at FBNQuest, Uwadiae Osadiaye, said in a report on Thursday, “We expect increased pressure on parallel market rates to be a major fallout of this decision.”
The President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, confirmed the six per cent drop in the value of the naira on Thursday.
He said, “The fall is partly as a result of the demand from the oil marketers, because now they have to source their dollars for imports at the secondary market. So, that has really eaten the market up and people that are having dollar positions have started to draw back.
“If the pressure continues, and then, there is no any form of further deepening of the market by the Central Bank of Nigeria, I expect the naira to weaken to about 360 or 370 in the coming weeks. Let the CBN look at how they can really make the BDCs to perform their role of servicing the critical retail sector of the market.”
Also on Thursday, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, explained that the government could not provide foreign exchange for the importation of fuel as a result of the decline in earnings from crude oil sales.
“You cannot give what you don’t have. If you free up Nigerians to find sources of funds, they will find those secondary funds. They will import the product; the burden on the NNPC will reduce and the country will have peace and subsidy will go away permanently,” he said.
Meanwhile, the Nigeria Labour Congress has invited civil society bodies in the country to attend its emergency National Executive Committee meeting today (Friday) to discuss an appropriate response to the removal of subsidy on petrol.
The General Secretary, NLC, Dr. Peter Ozo-Eson, told one of our correspondents that the congress had written to the civil society bodies in Abuja and Lagos to be part of the NEC meeting and that they had agreed to the request.
Ozo-Eson said that the NLC had moved the NEC meeting it earlier called for Monday next week to deliberate on the 45 per cent increase in electricity tariff today (Friday) because of the unexpected removal of fuel subsidy.