Fuel Price Will Skyrocket to 1200/L or More Soon, Is It Possible?

Following a clash between the Nigerian National Petroleum Company Limited (NNPC) and fuel marketers on the prices of commodities, there have been reports that fuel prices may soon witness a drastic increase. This has become more worrisome as the naira continues to fall against the dollar, prompting the resurrection of the debate on the existence of hidden subsidies.

According to The Punch Newspaper, Economists and marketers have described the alleged hidden subsidy as a transfer of wealth from consumers to the government. CEO of Financial Derivatives Company, Bismarck Rewane, claimed that the subsidy on fuel was reduced, and not abolished as earlier stated at the inauguration. Consequently, he added, there is a convergence of exchange rates that resulted in money being transferred from consumers to the government. However, it remains unclear what the government has done with this increase in revenue.

Similarly, oil marketers have expressed their concerns, stating that the subsidy on petrol continues to rise, given the decline of the naira against the dollar and the cost of crude oil. They further explained that petrol should sell for N1,200/litre in a free market.

But in response, Chief Corporate Communications Officer of the NNPC, Olufemi Soneye, denied the allegations of partial subsidy, stating that the government no longer subsidizes petrol. As an energy company, he explained, the focus remains on fostering a vibrant and energy-secure Nigeria.

In conclusion, it's evident that there's a clash between the NNPC and fuel marketers over fuel prices, and amidst the claims of hidden subsidies, it's uncertain what the future holds for fuel prices in Nigeria.