FUEL PRICE AND FOREX ARE OUTSIDE OF OUR CONTROL: CBN NOTIFIES REPS

The price of Premium Motor Spirit PMS and the exchange rate between the naira and the dollar are two things that the Central Bank of Nigeria (CBN) has no influence over, it said to the House of Representatives yesterday.

Clement Osagie, made this statement when he testified before the House ad hoc committee looking into the recent increase in fuel prices following the elimination of federal government subsidies for the good.

Osagie stated that the monthly CBN intervention payment for fuel importation was $150 million and that the demand for fuel has decreased by 30% as a result of the price increase brought on by the elimination of subsidies. The coming four months would bring good times, urging the federal government to oppose importation and promote local production to lessen the current issues in the country's economy.

According to Osagie, there is a direct relationship between the price of fuel and exchange rates, as well as a direct positive correlation between imported goods.

Specifically, we're talking about fuel, the PMS, and I think it should have an influence on petrol prices because Mr. President declared after his inauguration that he wanted to establish a system of unified exchange rates. And the Central Bank is left with no choice but to abandon the exchange scheme they were defending in favor of one that will seem to the market as a single rate.

Perhaps, there won't be any more subsidies or bottlenecks in the PMS market. Thus, it develops into a true market enterprise. There will be more rivalry in that industry, which will result in lower prices.

According to Ogbugo Ukoha, executive director of Distribution Systems at the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA), market variables demand decide fuel prices.

The Petroleum Industry Act (PIA) has provided regulators the power to step in, which is why the NMDPRA implemented competition to cartel forming.

“PIA has given the authority to intervene to avoid cartel building, which is why we have introduced competition and deal with illegal profiteering, and more importantly, to work with the Federal Consumers Protection Council in relation to consumer protection,” said Ukoha.

Babajide Benson, the chairman of the ad hoc committee, stated in his speech that the lawmakers would continue to intervene through the legislative process to address the effects of the subsidy regime.

He pleaded with the authorities to make sure the PIA was implemented correctly

Nigerians are still suffering as a result of the increase in gas prices. How can we help？ Our responsibility is to make sure that the impact of the price hike is severely addressed and that Nigerians don't endure excruciating hardship. We're here, in part, to make them work for Nigerians, the man stated. A global exchange market for national currencies is known as FX market. Forex markets typically rank among the biggest and most liquid asset markets in the world due to the global nature of trade, commerce, and finance, currencies are traded against one another. Currency exchange takes place on the FX market. The lack of a central marketplace is the feature that distinguishes this global market the most. Instead, over the counter (OTC) electronic currency trading takes place, rather than taking place on a single centralized exchange, all transactions take place over computer networks among dealers worldwide.