Amidst soaring inflation and foreign exchange challenges, Nigeria’s petroleum sector is grappling with a profound disruption as the price of petrol trucks has soared from a mere N7 million in May to an unprecedented N25 million.
Akin Akinrinade, Chairman of the Independent Petroleum Marketers Association of Nigeria in the Satellite Depot branch, has sounded the alarm on the industry’s turmoil, attributing the staggering price surge to poorly handled foreign exchange rates.
In a recent statement, Akinrinade highlighted the crippling impact of inflation on the downstream oil sector, citing the astronomical rise in operational expenses.
He pointed to the mismanagement of foreign exchange rates as a primary factor driving up the landing cost of petrol, making business operations unpredictable and challenging. Additionally, high bank lending rates have compounded the industry’s financial strain.
He said: “The forex has been badly managed, and this has impacted the landing cost of PMS (premium motor spirit), also known as petrol, and by extension the pump price.
“The cost of doing business has also gone up astronomically. A truck of petrol that was N7 million in May this year is now N25 million. Business is really unpredictable now. Bank lending rate is also very high, contributing to the high cost.”
This turbulence has triggered a ripple effect across Nigeria’s transportation sector, with commercial transporters swiftly increasing fares.
A Nairametrics review of road transportation fares between Abuja and Benin City and Abuja and Lagos places prices between N20,000 to N27,000, depending on the transporting company in use.
Also, private car owners in Abuja are beginning to purchase more fuel-saving liquids sold at petrol stations to reduce fuel usage, especially those who drive to work daily.
Costs are expected to rise even further due to the high demand for interstate travel during the Christmas holidays.
Meanwhile, many Nigerians are not earning higher than they were when macroeconomic conditions were better.