The Central Bank of Nigeria (CBN) clarified its lack of control over the price of Premium Motor Spirit (PMS), commonly known as fuel, and the foreign exchange rate between the naira and the dollar.

Clement Osagie, a principal manager in CBN, made these statements during his appearance before the House of Representatives’ ad-hoc committee investigating the recent fuel price hike following the removal of subsidy.

Osagie disclosed that the demand for fuel has decreased by 30 percent due to the price hike resulting from subsidy removal, and revealed that $150 million was paid monthly for fuel importation through CBN intervention….CONTINUE READING

He urged the federal government to promote local production and discourage importation as a means to address the current economic challenges in the country. Osagie expressed hope for positive developments in the coming four months.

Regarding the relationship between foreign exchange rates and fuel prices, Osagie explained the direct proportional connection between imported products and exchange rates. He highlighted that the PMS market is transitioning to a real market enterprise with increased competition, which is expected to bring down the fuel prices.

Ogbugo Ukoha, the executive director of Distribution Systems at the Nigeria Midstream and Downstream Petroleum Regulatory Agency (NMDPRA), emphasized that market forces of demand and supply determine fuel prices. However, the Petroleum Industry Act (PIA) grants regulators the authority to intervene and prevent cartel building, and NMDPRA has introduced competition to combat illegal profiteering.

Chairman of the ad-hoc committee, Babajide Benson, assured that legislative interventions will continue to address the impact of the subsidy regime on Nigerians. He urged the regulators to effectively implement the PIA to protect consumers and alleviate the hardships caused by fuel price increases.