The naira has once again faced a significant decline against the dollar in the foreign exchange market, following yet another increase in fuel prices by the Nigerian National Petroleum Company Limited (NNPCL). This recent adjustment marks a continuing trend of rising costs for Premium Motor Spirit this year.

Recent data from the FMDQ reveals that the naira dropped considerably, closing at N1625.13 per dollar on Wednesday, a sharp decline from N1561.76 on Tuesday. This represents a depreciation of N63.37 in just one day.

Interestingly, this drop comes after a brief period of gains for the naira, which had appreciated by N73.39 against the dollar the day before.

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The situation worsened for the naira in the black market, where it fell to N1895 per dollar from N1780 on Tuesday. Additionally, foreign exchange market turnover saw a notable decline, with daily transactions plummeting to $170.60 million on Wednesday, down from $253.68 million the previous day.

In response to the rising fuel costs, NNPCL has announced a new price increase, raising the cost of petrol to N1030 per litre from N898 per litre, marking the second consecutive price hike in September 2024.

An industry insider, who chose to remain anonymous, remarked, “The continuous price increases will likely exert more pressure on the already unstable exchange rate.” A market analyst added, “We’re witnessing the direct effects of NNPCL’s fuel price adjustments on the naira. Each increase places higher costs on businesses and consumers, which in turn affects demand for foreign exchange.”