The Independent Petroleum Marketers Association of Nigeria has warned that the price of gasoline at the pump may skyrocket, and Nigerians may be forced to pay as much as N700 a liter.
According to the National Operations Controller, Mike Osatuyi, If the oil marketers are unable to secure foreign exchange at the Central Bank of Nigeria’s official rate, the present price of N170 might more than double.
The IPMAN’s boss disclosed this during a Monday interview with the News Agency of Nigeria.
He explained that if there aren’t enough foreign exchange options available on the legal market, oil marketers may turn to the black market, which would force them to raise gasoline prices.
“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.
The fuel subsidy, according to Osatuyi, should be eliminated because it contributes to the government’s growing debt load and budget imbalance. He contends that the government loses a significant amount of money as a result of gasoline subsidies and that they prevent competition in the oil sector, where the Nigerian National Petroleum Company Limited holds a monopoly.
The IPMAN boss stated, “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 the 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 pragmatic measures taken by the government for pipeline surveillance and zero tolerance to crude oil theft.”
