Nigeria’s currency, the Naira, lost more value against the United States (US) Dollar at the parallel market yesterday.
Naija News understands that on Thursday, January 4, the Naira plummeted to N1,240 per US Dollar from N1,235 per dollar it exchanged for the previous day.
However, the Naira was said to have appreciated to N895.23 against the US Dollar in the Nigerian Foreign Exchange Market (NAFEM), thus widening the gap between the official and parallel market exchange rates to N344.77 per dollar yesterday from N199.88 per dollar on Wednesday.
Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N895.23 per dollar from N1,035.12 per dollar on Wednesday, indicating N139.77 appreciation for the Naira.
Meanwhile, a prominent economist and Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, has argued that it is impossible for fuel to sell at N1,200.
In an interview with Channels Television, Rewane argued that fixing the pump price of fuel will bring the nation’s economy to its knees.
Naija News reports Rewane went on to say that an N1,200 increase in the price of fuel at the pump would make it more expensive in Nigeria than it is in other countries and encourage stakeholders to begin smuggling fuel into the nation.
“That is not possible because at N1,200 per litre, petrol price in Nigeria will be more expensive than all the neighbouring countries and in that case, there will be smuggling of petrol into Nigeria rather than out of Nigeria.
“What I think I understand is that petrol could range from N600 to as high as N1,200 depending on what goes into the template, there is a misunderstanding of concepts here, so i will ignore that. At N1,200 per litre, the distortionary effect to the allocation of resources and prices and the knock-on effect on other prices will be so significant that it will bring the economy to its knees, so I do not think it is realistic to even consider that at this point in time,” Rewane said.
Naija News understands that Rewane’s comments came a day after certain news articles disclosed the possibility of a fuel price hike to N1,200.
The Nigerian National Petroleum Company Limited (NNPCL) promptly dismissed these reports, affirming that there were no plans to increase fuel prices.