NNPC blames forex shortage for fuel price hikes

File photo: Fuel queue in a petrol station

The Nigerian National Petroleum Company Limited has attributed the fluctuating prices of Premium Motor Spirit, commonly known as petrol to foreign exchange illiquidity.

This was disclosed by the Executive Vice President of Downstream at NNPC, Mr Adedapo Segun, during his appearance on TVC News’ Journalists’ Hangout on Thursday.

Segun explained that the deregulation of the petroleum sector, as stipulated by the Petroleum Industry Act (PIA) of 2021, has allowed prices of PMS to be determined by unrestricted free market forces.

According to him, the exchange rate has played a significant role in shaping the cost of petrol, a situation further exacerbated by limited access to foreign exchange.

“The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices,” Segun said.

Regarding the ongoing fuel scarcity across the country, Segun assured the public that the situation would improve within a few days.

He noted that more filling stations would soon recalibrate their pumps and resume selling PMS which would ease the current shortage.

Segun also provided an update on the Dangote Refinery, stating that NNPC was anticipating the September 15 timeline for the commencement of PMS lifting from the refinery.

This development, he said is expected to bolster the nation’s fuel supply and reduce dependence on foreign imports.

“No right-thinking individual would be comfortable with the current fuel scarcity,” Segun stated, adding that NNPC Ltd. is working closely with marketers to ensure filling stations open early and close late to meet the demands of Nigerians.

The Chief Corporate Communications Officer of NNPC, Olufemi Soneye, also reassured the public that NNPC was actively engaging with relevant authorities to prevent product diversions and ensure timely deliveries to all stations across the country.

“The scarcity should ease in the next few days as more stations recalibrate and begin operations,” Soneye added, urging Nigerians to remain patient as the supply chain stabilises.

On Tuesday, Nigerians were met with a sudden fuel price hike, as the pump price surged from around N600 to N855 per litre.

Sources indicated that a directive had been issued, instructing retail outlets to raise petrol prices. The directive confirmed that NNPC Retail Management had approved the increase in the price of petrol.

This sharp rise comes just two days after the company disclosed challenges in fuel importation, citing an $8 billion debt as a major hurdle.

The price hike has sparked a public outcry, with stakeholders condemning the increase and calling for an immediate reversal.