The naira continued its downward spiral against the dollar at the foreign exchange market following another round of fuel price increases by the Nigerian National Petroleum Company Limited.
This latest adjustment marks yet another spike in the pump price of Premium Motor Spirit this year.
According to data from the FMDQ, the naira weakened significantly, closing at N1625.13 per dollar on Wednesday, compared to N1561.76 exchanged on Tuesday.
This drop comes after the naira had made some gains on Tuesday, appreciating by N73.39 against the dollar.
However, on Wednesday, the currency reversed its fortunes, also weakening in the black market where it fell to N1895 per dollar from N1780 the previous day.
Foreign exchange market turnover also witnessed a decline, with daily transactions dropping to $170.60 million on Wednesday from the $253.68 million recorded on Tuesday.
In response to the rising fuel costs, the NNPCL announced a fresh hike, increasing the price of petrol to N1030 per litre from N898 per litre, marking the second consecutive increase in September 2024.
An industry insider, speaking anonymously, commented, “The back-to-back price hikes will likely add more pressure on the already volatile exchange rate.”
A market analyst also noted, “We’re seeing the direct impact of NNPCL’s fuel price adjustments on the naira. With each increase, businesses and consumers face higher costs, which in turn affects demand for foreign exchange.”
