With Brent Crude oil, Nigeria’s benchmark trading at $69.74 per barrel up by over 1.25 percent, while this means an increase in oil revenue for Nigerian government, the excitement, however, is quickly wiped, as the spike could mean a change in petrol price is imminent in the country.
Recall that the Petroleum Products Pricing Regulatory Agency (PPPRA) had in 2020 announced that it was no longer involved in the fixing of the pump price of petrol, disclosing that the interplay of market forces and not the organisation now determines how much Nigerians buy the product.
The first time oil price surged above the $70 dollars mark since the Covid-19 pandemic began was on March 8, 2021, when it traded as high as $71.38 per barrel.
In March when oil price traded above $70, the Petroleum Products Pricing Regulatory Agency (PPPRA) released a template increasing petrol price to N212 per litre, which was later deleted.
With Goldman Sachs predicting oil prices could hit $80 before the end of the year; it is only a matter of time before a new petrol pump price is announced in Nigeria.
NNPC after the reaction that greeted the template promised Nigerians there would be no price increase from the current N165 per litre, an assurance it has sustained to the month of May.
Interestingly, in a recent statement released by Mele Kyari, general managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), cried out that the company could not continue to bear the subsidy burden.
According to him, NNPC pays between N100-120 billion a month to keep the pump price at the current levels and it is affecting how much it remits.
Speaking during a ministerial briefing, Kyari also added that there might be a need for a new price to be implemented.
