With Nigerians yet to come to terms with the new and shocking hike in fuel price, the National Operations Controller of the Independent Marketers Association of Nigeria (IPMAN), Mr Mike Osatuyi has justified the development.
Recall, Theliberationnews reported that the Nigerian National Petroleum Company Limited (NNPCL) increased the pump price of Premium Motor Spirit (PMS) popularly known as petrol to N617 per litre at outlets in Abuja and N568 in Lagos.
The development which has left many Nigerians emotionally distressed owing to the possible increment in cost of living it will bring was announced on Tuesday.
The reasons given by Osatuyi are as follows:
Increase in crude oil prices in the international market
Brent crude benchmark price had surpassed $80 per barrel for the first time since May 2023. This is a sign that supply is gradually tightening and demand is expanding.
This happened after Saudi Arabia agreed to cut its output to firm up oil prices, reflecting in 1 million barrels reduction per day from June.
Increase in the Dollar to Naira exchange
Another factor that led to the increase in fuel price to be sold at N617 per litre was the hike in the exchange rate between the naira and the US dollar closed at N795.28/$1 at the official Investor and Exporters window.
This was established after the order by the President that there should be a unified exchange rate. On Monday, 17th July 2023, it traded N820/$1 at the unofficial I&E Window.
The imports by many companies have not arrived in the country as they need more naira to put into dollars in order to import.
With the dwindling power of the naira, currently going for more than N800 to a dollar, they need more naira to put into dollars in order to import. Naira is becoming cheaper than before.
