Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, said fuel price shouldn't rise in Nigeria since the international crude oil price declined. Rewane, who is a member of President Muhammadu Buhari's technical advisory council on economy, however, defended the fuel price increase, stating that Nigeria's neighbouring countries pay more for fuel.
Rewane the technical advisory council advised President Buhari to deregulate the oil industry, and since this has been done, the price of fuel should go up when crude oil price rises in the international market. Despite the decline in crude oil price, the government chose to increase the ex-depot price of petrol from NGN147.67 kobo per litre to NGN155.17 kobo per litre on Friday, November 13, 2020.
The increase of the ex-depot price of petrol - which is the amount marketers buy fuel from the NNPC - affected the fuel price, as it moved between N167 and N175 per litre - the average price in fuel station is NGN170 per litre, "There's been a deregulation of the price of petroleum, and there's a price modulation formula, PPRA format.
"So if the price of crude oil increases, then the price of pump price of petrol also increases, if it (crude oil) reduces, pump price of petrol should actual decline. As far as I know, in the month of October, the price of crude actually came down, it was trading at about $38, $36. So totally speaking - I don't have the data - the price of refine petroleum products should actually be declining."
While defending the fuel price increase, Rewane said Nigeria's fuel price is still lower than neighbouring countries that sell their fuel at an higher price. He also blamed exchange rate and availability of fuel as reason behind the fuel increase in Nigeria, "there are other things that go into that template, things like the exchange rate, availability of oil.
"So it's a public document and they make it open to everybody. So transparently, there's no question about the fact that the union; members of the PPRA includes union and youths - they must have gone through this before they determined the price. What the technical advisory council advise is deregulation (of) the price, so that it is controlled by market forces."