By Charles Adingupu
The argument that market forces will determine the pump price of petrol following the withdrawal of subsidy is gradually coming to reality as a recent survey showed that the national average price of petrol will rise further as marketers benchmark costs against rising exchange rates.
Some of the Marketers who spoke against the backdrop of the continued depreciation of the naira, said the implication would be that pump price will also increase in relation to the original figure used in fixing current prices.
The current national average pump price of N500 per litre was arrived at when the exchange rate was N661/$.
Investigations revealed that most major oil marketers have adjusted their pump prices to N492-495 in Lagos, contrary to the N488 earlier floated by the industry shortly after the removal of subsidy was announced by President Bola Tinubu on May 29, 2023.
Also in Lagos, most independent marketers have adjusted further to an average of N515, just as available report stated that outside Lagos, the pump price has jumped to over N650.
The marketers said that with the closing rate at the Investors and Exporters, I&E, foreign exchange window since last week reaching about N770/$ the pump price is likely to hit N550 per litre by early next month.
Our findings showed that Marketers have commenced the process of importing the product under the new market regime just as the instability in forex, is creating apprehension in oil marketers who are still finding the business environment very uncertain to raise funds for the importation of the product.
A few oil marketers have started negotiating with banks but such engagements were being scuttled by the current instability in the business environment. However, oil marketers said they have not given up and will intensify efforts to import commercial quantities of petrol.
Meanwhile, our reporter gathered yesterday that the depot price of petrol has risen in the past few weeks.
