The pump price of Premium Motor Spirit (PMS), popularly known as petrol, may hit ₦180 per litre sometime in December 2020, according to marketers, as oil prices extended their rally on Monday, with Brent crude trading near $50 per barrel.
Brent, the international oil benchmark, has risen by more than 15 per cent since November 13 when the pump price of petrol was adjusted in the country. It sold for $49.39 per barrel as of 7:29pm Nigerian time on Monday.
The Minister of State for Petroleum Resources, Timipre Sylva, 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 before the end of December, considering the current realities in the 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.
Osatuyi said the petrol price could reach ₦200 per litre if oil price crossed the $50 per barrel mark.
“The devaluation of the naira by ₦6 will actually have an 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 (NNPC) 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 said.
The Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, also told our correspondent 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 labour regarding deregulation, adding that discordant tunes would leave investors worried.
“The impression has been that deregulation has been agreed with labour already. It would always help when you know clearly the direction of government,” he added.
The Federal Government removed petrol subsidy in March this year after reducing the pump price of petrol to ₦125 per litre from ₦145 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, rising from ₦121.50–₦123.50 per litre in June to ₦140.80-₦143.80 in July, ₦148-₦150 in August, ₦158-₦162 in September and ₦163-₦170 in November.