The Independent Petroleum Marketers Association of Nigeria (IPMAN) has indicated that the price of Premium Motor Spirit (PMS), commonly known as fuel, is likely to continue increasing as long as the value of the US Dollar rises in the foreign exchange market.
Chinedu Okoronkwo, the National President of IPMAN said that the speculation of further fuel pump price hikes is not unfounded. He emphasized that the ongoing fuel subsidy removal has shifted the determination of pump prices from government control to market forces, particularly due to the dollar-denominated purchasing of the product. As the value of the US Dollar, currently around 890 Naira per $1, continues to climb, fuel pump prices are expected to follow suit.
Okoronkwo also proposed a potential solution to mitigate the impact of rising fuel prices. He urged the government to intensify efforts in making Compressed Natural Gas (CNG) readily available for Nigerians. By promoting the use of CNG as an alternative fuel source, the dependency on imported petroleum products and their associated price fluctuations could be reduced.
The Nigerian Naira’s exchange rate with the US Dollar has further declined, reaching N782.38/$1 in the official market, while in the parallel market, it stands at 910 Naira per $1. Consequently, this currency depreciation is anticipated to contribute to an increase in the pump price of fuel, potentially surpassing N617 per litre.
