Naira Dips Further as NNPCL Raises Fuel Prices Again

The drop in the value of the naira comes on the heels of NNPCL’s latest adjustment of the pump price of Premium Motor Spirit (PMS), which saw petrol prices rise from N898 per litre to N1030 per litre.

Lagos, Nigeria — The Nigerian naira extended its decline against the U.S. dollar at the foreign exchange market, following another round of fuel price increases by the Nigerian National Petroleum Company Limited (NNPCL).

Data from FMDQ Exchange on Wednesday showed that the naira closed at N1625.13 per dollar, compared to N1561.76 the previous day—indicating a depreciation of N63.37. This fall came just a day after the naira had recorded gains, appreciating by N73.39 against the dollar on Tuesday.

The currency’s decline was also evident in the parallel market, where it weakened to N1895 per dollar from N1780 on Tuesday.

Market turnover at the official foreign exchange window also dropped significantly, with daily transactions falling to $170.60 million on Wednesday from $253.68 million recorded on Tuesday.

The drop in the value of the naira comes on the heels of NNPCL’s latest adjustment of the pump price of Premium Motor Spirit (PMS), which saw petrol prices rise from N898 per litre to N1030 per litre. This marks the second consecutive increase in September 2024 alone.

Industry experts have voiced concerns that these back-to-back fuel price hikes will exert additional pressure on the already struggling naira. An industry insider, speaking on condition of anonymity, said, “The continuous rise in fuel prices is likely to worsen the exchange rate instability, as it fuels inflation and increases the cost of doing business.”

A market analyst added, “The direct impact of NNPCL’s fuel price adjustments is being felt across the economy. With each increase, businesses and consumers are forced to contend with higher costs, driving up the demand for foreign exchange.”

The outlook for the naira remains uncertain as market participants closely monitor the government’s response to the escalating fuel prices and its effect on the nation’s exchange rate.