Independent Petroleum Marketers Association of Nigeria (IPMAN) warns that Premium Motor Spirit, popularly called petrol price will rise again as naira nears N1000 and crude oil hits $95 per barrel.
According to the analysis of data provided by the oil marketers, the Federal Government may spend about N1.68tn as subsidy on petrol, from September to December this year.
PMS dealers stated on Thursday that the pump price of petrol should be between N890 to N900/litre based on the fall of the naira against the United States dollar and the surge in the price of crude in the international market.
Petrol currently sells at between N598 and N617/litre depending on the location of purchase, fuelling suspicion that the commodity is being subsidised by the Federal Government.
The government and the NNPCL have not officially admitted that subsidy on petrol has been reintroduced. President Bola Tinubu had on May 29 announced ended the subsidy regime during his inaugural address.
The government subsidises PMS through the Nigerian National Petroleum Company Limited. NNPCL is the sole importer of PMS. Other marketers stopped PMS imports due to their inability to access foreign exchange.
The removal of subsidy led to an increase in the pump price of petrol from about N198/litre in May to the current rate of N617/litre. But the fall of the naira coupled with the rise in crude oil price have continued to mount pressure on the cost of PMS.
Dealers in the downstream oil sector explained that the cost of crude oil and the exchange rate of the naira-dollar accounted for over 80 per cent of the cost of PMS.
Brent crude, the global benchmark for oil, rose to about $95/barrel on Thursday. It had peaked to $97/barrel the preceding day, which was the highest figure in 2023.
Oil had started the year at about $82/barrel, dipped to $70/barrel in June, but traded above $94/barrel in the past week.
