Business Hilights

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Udoma, Buhari, Adeosun

Fuel price hike imminent as FG raises landing cost from N67.7 to N212.7

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Apprehension driven by possible fuel price hike may begin to engulf the country in this early part of New Year as the federal Government has jerked up the landing cost of Premium Motor Spirit (PMS) from N67.7 to N212.7 per litre.

The meaning of the hike is that independent marketers will have to source and pay extra cost of over N2.369 billion and experts say, the implication is that end users will pay more at pump price.

Globally, oil prices are enjoying its first ever highest levels since July 2015 with Brent reaching $58.37 and $55.24, before paring gains on the strong dollar.

Whereas experts trace the new hike in landing cost to the final lap of full scale deregulation of the downstream petroleum sector, analysts have started picking holes, saying Nigerians were not duly carried along and such bitter pill should not come at the beginning of a year.

Currently, the modulated bracket of N135-N145 which is given as official price for fuel may not last longer again.

It was however clear if the new development is federal government’s tactical response to the ongoing clamour by organized labour to raise minimum wage to between N56,000 and N96,000.

According to the Head of Energy Research at Ecobank, Dolapo Oni, “When oil price was at $52 dollars per barrel, the landing cost was N165 per barrel, later when it was $55, the price soared to N210 per litre,” arguing that now it is $58 per barrel, the landing cost hovers around N213 per litre.

Only before the end of the year, the Central Bank of Nigeria (CBN) asked banks to submit bids for a “special currency auction” to clear the backlog of matured outstanding dollar obligations for petrol importers and selected sectors of the economy.

However, checks at the official website of the Petroleum Products Pricing Regulatory Agency (PPPRA), an agency saddled with pricing regulation did not show anything like price template alteration even though facts on ground show danger of either fuel scarcity of excruciating hike in price sooner than later.

If this happens, this is will another time when the federal government increased fuel price during the New Year. Former President Goodluck Jonathan did it and it earned him the loss of second term bid.


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