Three reasons why fuel prices increased to N640/ltr – IPMAN

Checks carried out by Nairametrics on Tuesday 18 July revealed that some fuel stations in Abuja, Federal Capital Territory (FCT) were selling fuel at N640 per litre.

Meanwhile, as of Monday July 17, Nairametrics can confirm that fuel stations were still selling at N540 per litre.

What changed?

Several motorists in Abuja have raised the alarm that the stations are raising their prices to an average of N610 to N640 per litre. In a brief conversation with Nairametrics on Tuesday, Mike Osatuyi, the National Operations Controller for the Independent Marketers Association of Nigeria (IPMAN), said he had previously projected that from the third week of July 2023 when new imports come in of fuel to the country. , there could be an upward revision of the prices of the fuel pumps, which has now happened.

He attributed the increase in the fuel pump price to three factors that he highlighted:

  • The recent increase in crude oil prices in the international market. Recall that Nairametrics had reported days ago that the benchmark price of Brent crude had exceeded $80 per barrel for the first time since May 2023.
  • The increase in the change from Dollar to Naira. Nairametrics recently reported that although the exchange rate between the naira and the US dollar closed at N795.28/$1 on the official investor and exporter window on Monday 17 July 2023, it was traded at N820/$1 on the unofficial I&E window.
  • The third factor may apply only to northern states like Sokoto and Maiduguri, which could end up paying even more than the N640 per liter some Abuja residents are paying as of this morning. This is due to higher transportation costs that require traders to transport fuel to distant cities in the north.

Are fuel pump prices likely to drop?

Fuel pump prices will depend on market forces. Recall that two months ago, during an interview with Arise Television, Mele Kyari, Group CEO of Nigerian National Petroleum Company Limited (NNPCL), said that fuel pump prices in the country reflect the current market price of raw material.

What this means is that the prices in the market can go down at any time and the market will always adjust. It is important to note that as of this morning (10:53 am, GMT+1), the price of Brent crude stood at $78.86 per barrel.

What can Nigerians do to cope with the new prices?

Concerned parties in the Nigerian energy industry believe that Nigerians should create alternative energy sources and make some lifestyle changes to cope with rising fuel pump prices due to the removal of fuel subsidies.

Some of the changes include:

Carpooling/car-sharing and making contributions for the only car used for such purposes.

Moved out cars and generators run on Autogas

Use public transportation systems to get to work in the states where they are available.

Reduce driving time. Drive for shorter periods and use your car only when necessary.

Reduce the number of cars you own/drive.

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