The Major Oil Marketers Association of Nigeria (MOMAN) has shed light on the recent fuel price increase, attributing it to key market realities and exchange rate fluctuations. According to a statement released on Wednesday, MOMAN disclosed that the exchange rate used to determine the price of Premium Motor Spirit (PMS) is now at N825/$1, significantly higher than the N630/$1 used in May.
MOMAN highlighted that the Nigerian National Petroleum Company Limited (NNPCL) determined the pump price using an exchange rate of around N630 to the US Dollar in May. However, as of July 19, the exchange rate has surged to approximately N825 per dollar. This significant devaluation has led to an additional cost of N100 per litre for importing PMS into the country, resulting in the recent increase in pump prices from N500 per litre to N568 and N617 per litre across various states.
The major oil marketers explained that approximately 80 percent of the fuel price is influenced by foreign exchange rates and international crude prices, while distribution costs, statutory dues, and margins account for the remaining 20 percent.
They further clarified that the recent fuel price hike is a result of cost-reflective adjustments in response to prevailing market conditions, particularly the rise in foreign exchange rates and PMS prices in the global market.
While acknowledging the impact of the increase on consumers, MOMAN urged the government to introduce palliatives to alleviate the burden of higher fuel prices. Additionally, they emphasized the need for proper utilization of the proceeds generated from the removal of fuel subsidy, ensuring that the funds are invested in critical areas that benefit the citizens and the nation as a whole.
