Petrol price may hit N180 as oil nears $50

The pump price of Premium Motor Spirit, popularly known as Petrol, may hit N180 per litre this month, according to marketers, as oil prices extended their rally on Monday, with Brent crude trading near $50 per barrel.

The international oil benchmark, Brent, has been increased by over 15 percent since the 13th of November when the pump price of petrol was adjusted in the country. It was $49.39 per barrel as of 7;29pm Nigerian time on Monday.

Timipre Sylva, the Minister of State for Petroleum Resources had said in September that the Federal Government had stepped back in fixing the price of petrol, adding that market forces and crude oil price would determine the cost of the product.

The National Operation Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, said fuel prices might increase drastically before the end of December, considering the current situation in the fuel market.

”Once we have deregulated, petrol price is a function of crude oil price. If in the past few months, oil price has hovered around $40 to $44 per barrel, when it moves to $49-$50, we have to be expecting nothing less than N180 per litre of petrol”, he said.

He further stated that petrol price could reach N200 per litre if oil price crossed the $50 per barrel mark.

”The devaluation of Naira by N6 will actually have effect on the pump prices of fuel maybe by the end of this month or early next year,” he added.

He faulted the current situation in which the Nigerian National Petroleum Corporation remained the sole importer of petrol into the country despite the deregulation of petrol price.

‘‘As at today, NNPC is still practicing monopolistic deregulation because it is the only one importing petrol for Nigeria. If you deregulate, you are supposed to make forex available for other players,” he stated.

The Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji has also announced that private marketers were still unable to import petrol because of lack of access to forex. He said marketers were also concerned about the discussion between the Federal Government and labor regarding deregulation, adding that aggressive tunes would leave investors worried.

According to him; ”The impression has been that deregulation has been agreed with labor already. It would always help when you know clearly the direction of government”.

Recall that the Federal Government removed petrol subsidy in March this year after reducing the pump price of petrol to N125 per litre from N145 on the back of the sharp drop in crude oil prices. The price reduction lasted till June. Nigerians have seen increases in the pump prices of petrol four times in the past five months.