Forex Scarcity: Prepare for Increase in Pump Price of Petrol – Marketers

Forex Scarcity: Prepare for Increase in Pump Price of Petrol – Marketers

The pump price of petrol may soon be hiked due to the scarcity of foreign exchange needed for importation, oil marketers have warned Nigerians.

The United States dollar hit an all-time high last week, as it exchanged for N400 at the parallel market.

Marketers say if the situation is not immediately addressed, they cannot continue to sell the product at the approved pump price of between N135-N145 per litre.

The Punch reports that oil marketers on Monday lamented that their businesses have been struggling to continue to sell Petrol at the government stipulated range.

“The truth is that Nigerians just have to brace for higher PMS price; there are no two ways about it. The government cannot fund this market; the money is not just there. Even if the government wishes to assist, it does not have the wherewithal to do. So, Nigerians should brace for higher rates,” the newspaper quoted an unnamed official of top oil marketing companies.

The anonymous official added: “We are all aware that the price of crude has been falling in the international market and it is the dollar the government gets from crude sale that it uses to solve forex problems. So, there’s no fast rule or solution to it than for all of us, both users and marketers, to just prepare for a price hike.

“For marketers, they should know that the days of higher profits are gone. Before now, if you want to import petrol, you’ll have to wait for months and possibly bribe some people to get an import licence. But those days are gone; nowadays, every interested dealer can get the licence and this has created room for competition, which is why you still get the product at around N140 to N145 per litre. We only hope that this will continue as the dollar availability improves.”

A member of the Major Oil Marketers Association of Nigeria also told the newspaper that marketers hardly got forex at the rate that the government initially promised them.

He said, “It is very logical for the PMS price to rise any moment from now, for there is no way somebody can import at the rate of N400 to a dollar and you expect him to continue selling at the official ex-depot price. And mind you, the government promised to facilitate forex provision to marketers at N287 to a dollar, because you cannot buy at N400 and expect to continue selling at the prevalent rates you see at filling stations today.

“However, most depots are still managing the situation and are selling at the recommended price of N133.28 per litre to filling stations. It is when it goes above this price that you will notice the eventual increase in the pump prices of the PMS. So, if the trend of forex unavailability continues, then the situation may go out of the control of the marketers.”