Dollar Scarcity, Six Other Factors To Increase Fuel Price To N1,700 Per Litre

The President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PPROOAN), Billy Gillis-Harry, has revealed that scarcity of Dollars in the official market and crude oil cost could push fuel price to N1,700 after the subsidy is removed in June.

Gillis-Harry said the cost of fuel in Nigeria could touch N1,700 per litre, from the current N189 per litre, if there are no refineries before the subsidy is removed in June and should the oil marketers have to depend on the black market to access forex.

He disclosed that the price of fuel, also known as Premium Motor Spirit (PMS), would rise if the oil market receives forex supply from the official market, estimating a litre price at N700. 

“If the refineries are not working and we are going to depend on imports, then the price of petrol may rise even above the N700 or N750 that is being projected,” Gillis-Harry told Punch.

The oil marketer said there are factors that will skyrocket the cost of PMS. Aside from the scarcity of Dollars and the high rate of forex at both official and black markets, he also listed landing cost, logistics, overhead, and profit.

“This is because it is going to depend on the dollar rate and crude oil cost. When you check the landing cost, logistics, overhead, profit, etc, you might be looking at about N800, though the average is pegged at N700.

“And that is if we continue to depend on imports. Now, this calculation is based on when we get the product at the approved Central Bank of Nigeria dollar rate, and not at the over N740/$ black market price. 

“If the dollar is accessed at the black market rate, then you can double that N700/litre average price once subsidy is removed. So you should be looking at between N1,400 to N1,700/litre. This is why we must get our refineries working,” Gillis-Harry stated. 

It was learnt that should the Federal Government keep to its June timeframe to remove the fuel subsidy, Nigerians will pay as much as N8.4 trillion for the supply of petrol in the last six months of the year. 

However, if the government chooses to retain subsidy between July to December 2023, consumers of the refined products will spend N2.4 trillion.