November 15, (THEWILL) – The National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mike Osatuyi, has said that petrol pump price may rise astronomically as Nigerians could buy fuel at N700 per litre.
Osatuyi said the current price of N170 can more than double if the oil marketers are unable to obtain foreign exchange (forex) at Central Bank of Nigeria’s (CBN) official rate.
IPMAN’s boss made this known during an interview with the News Agency of Nigeria (NAN) on Monday.
He explained that forex scarcity at the official market might force oil marketers to approach the black market for forex and this will compel them to increase petrol price.
“If CBN failed to avail marketers of forex at official rate of N445 to a dollar after deregulation, importers will have no choice than to turn to the black market for forex, which will push up the pump price of petrol to between 650 naira to 700 naira per litre.
“Total deregulation remains the best solution to ending fuel scarcity. The deregulation of the downstream sector remains the only potent and lasting solution to scarcity.
“But the cost implication of the policy will make the petrol price too expensive for Nigerians, as deregulation will shift the burden from the government to users of the product,” Osatuyi said.
Osatuyi also said the fuel subsidy needs to go due to its impact on budget deficit and raising debt burden on the government. According to him, fuel subsidies deprive the government of huge revenue and do not allow competition in the oil industry, where the Nigerian National Petroleum Company (NNPC) Limited acts as a monopoly.
“Subsidy regime does not allow competition, while monopoly is the language of petrol business as the Nigerian National Petroleum Company (NNPC) Ltd. is the sole importer, manager and distributor of petrol.
“Subsidy kills efficiency in the procurement and supply chain of petrol business operations and deprives government of huge revenue.
“Nigeria’s debt servicing of N6.3 trillion per year is not healthy for the country with mere capital expenditure of N5.35 trillion.
“2023 budget projected crude oil production of 1.69 million per day, which is achievable in view of pragramatic measures taken by the government for pipeline surveillance and zero tolerance to crude oil theft,” The IPMAN boss stated.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
