Trouble ahead as marketer predicts further hikes in petrol prices

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

Rainoil Ltd's Group Managing Director, Gabriel Ogbechie, has cautioned Nigerians to brace for full market rates on petroleum products as the federal government fully deregulates the downstream sector.

Ogbechie shared this view during a live interview on Channels Television’s Business Morning show.

"Be Ready to Pay": Marketer Warns Nigerians to Prepare for Further Petrol Price Hikes
Source: UGC

Ogbechie's comments come amid a significant hike in Premium Motor Spirit (PMS) prices, which have surged from N175 per litre on May 29, 2023, to N1,300 per litre.

Nigerians to face market-adjusted fuel prices

He expressed skepticism about the exchange rate truly being "floated," suggesting instead that it resembles a "willing buyer, willing seller" situation.

It would be recalled that on September 3, the NNPC raised the price of petrol at its filling stations from N617 per litre to between N855 and N897, depending on the location.

Ogbechie indicated that petrol pump prices would likely fluctuate, ranging between N1,000 and N1,060 per litre in coastal areas, and potentially reaching N1,300 per litre in northern regions.

He said:

“As long as the price of crude oil keeps changing, as long as the exchange rate keeps changing, prices of petrol too will keep changing."

Since the removal of fuel subsidy in May 2023, petrol prices have tripled, worsening the challenges faced by citizens who rely on petrol to power their vehicles and generators due to a long-standing unreliable electricity supply.

Ogbechie, however, praised President Bola Tinubu's decision to remove the fuel subsidy, noting that it has fostered healthy competition within the downstream sector.

He noted that when the market is fully deregulated, a significant decrease in crude oil prices would lead to a corresponding reduction in petrol prices.

Similarly, a decrease or devaluation in the exchange rate would also result in lower petrol prices.

He added:

“Nobody can exactly tell you what will happen in the next six months. But Nigerians should just be ready to pay the market-determined prices for petroleum products.”

Holding a contrary view, Dr. Joseph Obele, the former executive chairman of the Independent Petroleum Marketers Association (IPMAN), expects petrol to sell below N600 at the commencement of the federal government's crude-for-naira initiative.

FG tells NNPC to buy stakes in local refineries

In related news, Legit.ng reported that the federal government had recommended that the NNPC invest in local refineries rather than operating government-owned ones.

Heineken Lokpobiri, the minister of state for petroleum resources (oil), stated that the federal government intends to encourage the national oil firm to acquire shares in the planned and existing private refineries.

He said the government would encourage NNPC Ltd to adopt a new model allowing private investors to run the refineries optimally.

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Source: Legit.ng