By Adewale Sanyaolu
There are palpable anxiety and fears in the downstream petroleum market over the Central Bank of Nigeria (CBN) decision to float the currency and its attendant effect on the prices of Premium Motor Spirit(PMS),popularly called petrol.
The CBN had two days ago directed Deposit Money Banks to remove rate cap on the naira at the official investors and Exporters’ Window of the foreign exchange market to allow a for a free float of the national currency against the dollar and other global currencies.
The development means buyers and sellers of foreign currency in the official FX markets are now allowed to quote rates they find comfortable for trading as against the former practice where rates were dictated by the Central Bank of Nigeria.
Following the development, the naira depreciated to N664.04/dollar at the close of trading at the I&E Window on Wednesday, according to data from the FMDQ Securities Exchange.
But the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Mike Osatuyi, said the removal of the peg on the naira could led to an upward review of petrol price.
He added that an increase in ex-depot prices will eventually force marketers to raise prices.
“If you want to order now for a truck, you will have like N21.8 million, we are going to increase it more than N500 per litre because if I buy at N480/N495, what price will I sell?” he queried.
But the National President of Petroleum Retail Outlets Association of Nigeria(PETROAN), Mr, Billy Gilly Harris, told Daily Sun in a telephone interview that he doesn’t subscribe to the postulation of arm chair economists. He explained that the recent policy on exchange rate unification is a welcome development that will liberalise the market.
Billy Harris dismissed the proposition that the policy will led to an increase in the price of petrol, but will rather undulate it.
‘‘The result that will come will be based on the realities that we face down the road. So it will be wrong for anybodyto suggest that prices of petrol will go up. Prices of petrol may eventually come down.
Meanwhile, NNPCL Retail, in a circular released on Sunday, directed marketers to consider merging their old orders that carry the old fuel price in order to buy a truck of 45 million litres of petrol.
Marketers had before the deregulation ordered one truck of petrol for about N7.7million.
However, the new circular by the company advised marketers who had probably ordered three trucks at N7.5m (N171/litre old price), to merge their orders or ask for a refund.
“Following the full deregulation of PMS, NNPC Retail has made the following options available to help customers manage the impact of the additional cash flow requirement: Marketers now have the option of consolidating pre-paid self-owned tickets for fresh tickets in line with the revised price.
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