Nigeria’s NNPC says no plans for fuel price increase amid scourging economy

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ABUJA/LAGOS (Reuters) – Nigeria’s national oil company said on Monday there were no immediate plans to increase gasoline prices, days after fuel marketers and former NNPC management called for the removal of a cap on price levels.

Maikanti Baru, group managing director of state oil company NNPC told reporters that there was “nothing like that in the offing.”

Fuel marketers are pressing the government to remove the current gasoline price cap of 145 naira ($0.4394) per litre, as they say they are struggling to buy the fuel, which priced in dollars, and sell it in Nigeria in naira at a profit.

A press release over the weekend from former NNPC leaders called the current price cap “not congruent” given the foreign exchange rate and low crude oil prices.

“We don’t want any cap because of the fluctuations of the dollar rate in the country,” Chinedu Ukadike, chief of staff to the national president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said.

Removal of the cap would also allow the forces of supply and demand to determine the price of petroleum products, he said.

The naira has plunged in value, hitting an all-time low of 420 to the dollar on the unofficial market late last month.

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But petroleum price increases are a sensitive issue in Nigeria, which has slipped into recession for the first time in more than two decades.

Any increase would hit consumers hard, potentially knocking support for the government of President Muhammadu Buhari. Buhari’s government is also battling militants in the Delta region whose attacks have cut oil production by more than 700,000 barrels per day (bpd).

Oil minister Emmanuel Ibe Kachikwu told Reuters that talks with militant groups were still ongoing, and that the country’s crude production stood at 1.6 million bpd despite force majeure declarations in place on four crude oil streams.

($1 = 330.0000 naira)

(Reporting By Felix Onuah, Alexis Akwagyiram and Libby George. Editing by Jane Merriman)

 

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