The National President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, has warned of a potential petrol price hike if crude oil prices continue to rise. He shared this projection during PENGASSAN’s National Executive Council meeting held on Thursday in Lagos.
“The crude price rose to $80 per barrel today. Without exchange rate improvements, PMS prices will increase in the coming weeks,” Osifo stated. He highlighted that the weak exchange rate exacerbates the high cost of Premium Motor Spirit (PMS), even as domestic refineries commence operations at limited capacities.
Exchange Rate and Petrol Price Hike Concerns
Osifo emphasized that exchange rate mismanagement remains a significant factor driving petrol price hikes. He explained, “The price of PMS is directly linked to our weak naira. If the exchange rate improves to below N1,000 to a dollar, PMS could sell for N500–N600 per litre.” He also pointed out the USD’s dominance in the oil and gas sector, noting that expenses such as equipment and salaries are dollar-denominated, increasing PMS costs in Nigeria.
Domestic Refining and Petrol Price Hike
Addressing misconceptions about local refining and the petrol price hike, Osifo clarified that producing locally does not necessarily lower prices significantly. “Producing locally does not mean selling below cost. Even farmers calculate their production costs before adding margins,” he explained. He further mentioned progress in rehabilitating Nigerian refineries, particularly the Port Harcourt and Kaduna facilities, which are expected to support domestic fuel supply.
Budgetary Challenges and Economic Implications
In a broader discussion, Osifo criticized Nigeria’s 2025 budget of ₦49 trillion (approximately $30 billion), describing it as inadequate for the country’s size and population. “The budget of $30bn is abysmally low for a country like Nigeria, especially when you compare it with nations like South Africa, which has a population of about 60 million but operates on a budget of over $120bn,” he stated.
He also called for Nigeria to leverage its abundant natural and mineral resources to reduce reliance on loans and increase its revenue base. Osifo noted that effective currency management and resource utilization are critical to mitigating economic pressures and addressing potential petrol price hikes.
