Petrol price hike imminent over biting exchange rate – PENGASSAN

Petrol price hike imminent over biting exchange rate – PENGASSAN

The President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, has warned that the price of Premium Motor Spirit (PMS), commonly known as petrol, could increase if the upward trend in global crude oil prices persists.

Speaking during PENGASSAN’s National Executive Council Meeting in Lagos on Thursday, Osifo highlighted the correlation between rising crude oil costs and Nigeria’s foreign exchange challenges, cautioning that the situation may lead to higher fuel prices.

“The crude price rose to $80 per barrel today. Without exchange rate improvements, PMS prices will increase in the coming weeks,” Osifo stated.

He attributed the nationwide high fuel prices to the volatile exchange rate, even with the gradual resumption of operations at domestic refineries. However, he noted that these facilities were not yet operating at full capacity.

Addressing misconceptions about refining, Osifo explained that producing high-quality PMS involves extensive blending and processing. “The old Port Harcourt refinery is functional, and there is significant progress at the Kaduna and Port Harcourt refineries. Refineries globally engage in blending operations; it is a normal part of the process,” he said.

READ ALSO:

• ISWAP influx: Southern govs activate regional security to curtail terrorism
• Nine die of suspected cholera in Rivers State
• Gaza ceasefire deal to start on Sunday despite ‘lose ends,’ U.S. insists

Osifo linked the rising cost of petrol to the weakened naira, explaining that a stronger exchange rate could stabilize PMS prices.

“The price of PMS is directly linked to our weak naira. If the exchange rate improves to below N1,000 to a dollar, PMS could sell for N500–N600 per litre,” he added.

Drawing comparisons with countries like Venezuela and Zimbabwe, Osifo stressed the importance of currency management in the oil and gas sector, which relies heavily on U.S. dollars for equipment, operations, and expatriate salaries.

On local refining, he refuted claims that it would automatically lead to significantly lower prices, emphasizing the importance of maintaining cost margins. “Producing locally does not mean selling below cost. Even farmers calculate their production costs before adding margins,” he explained.

In a separate discussion, Osifo criticized Nigeria’s proposed 2025 budget of ₦49 trillion (approximately $30 billion), describing it as inadequate for a country with a population exceeding 230 million.

“The budget of $30 billion is abysmally low for a country like Nigeria, especially when you compare it with nations like South Africa, which has a population of about 60 million but operates on a budget of over $120 billion,” he stated.

He urged the Nigerian government to explore its vast natural and mineral resources to increase revenue and reduce reliance on borrowing.

Petrol price hike imminent over biting exchange rate – PENGASSAN