From Juliana Taiwo-Obalonye, Abuja and Adewale Sanyaolu, (Lagos)
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, said there are no plans to increase fuel price.
Oil marketers on Monday, said due to the continued scarcity of foreign exchange to finance the importation of the Premium Motor Spirit (petrol), the price may increase from the official price of N145.
The Dollar hit an all-time high last week, as it exchanged for N400 at the parallel market.
According to them, if the scarcity of forex is not urgently addressed, the pump prices of petrol will not remain at the approved rates.
The Federal Government liberalised the downstream sector of the petroleum industry on May 11, 2016, and raised the pump prices of petrol from N86 and N86.5 per litre to between N135 and N145 per litre.
It also stated that the market was to be driven by the factors of demand and supply, as it was now largely in the hands of private sector players.
But oil marketers argued that despite the competition in the business, they were struggling to retain the price of the Premium Motor Spirit within the approved range.
However, Baru, after meeting with President Muhammadu Buhari, told State House Correspondents that he had not been directed to increase pump price.
“I have not been directed to increase pump price, even the other price was based on recommendation from the regulatory body. I’m not aware that they are planing to do any increase, you know there are several factors that necessitated that especially the issue of exchange rate that has moved and we don’t expect any serious changes.
“So far the request for forex for importation of gasoline popularly called petrol has been met, and our own supply situation is robust, we are meeting demands. We have over 1.4 billion liters on ground. So I don’t see any basis for increase. However, the review could be done by the right body. You should contact PPPRA (Petroleum Product Pricing and Regulatory Agency), that is the regulatory body as far as petrol pricing is concern,” he said.
The withdrawal of subsidy on petrol leading to a price peg of N135 and N145 per litre respectively was informed by the inability of the Federal Government to continue providing subsidy for petrol as a result of dwidling revenue accruable to government coffers.
Indeed, the Federal Government had failed to make provisions for subsidy in the 2016 budget, a move that created suspicion among petroleum products marketers prior to the final removal of subsidy.
According to the current petrol pricing template of the PPPRA released in May 2106, the total cost of petrol after all the ancillary cost have been added up is pegged at N140.40 while the retail price band is pegged at N135-145.
But curiously, no retail outlet, especially the ones belonging to NNPC had sold at N135.Most of the NNPC retails outlets had stocked to the cap retail price of N145 per litre.
Prior to the removal of subsidy in May, the PPRA had introduced a price modulation framework on January 1, 2016, with the aim of ensuring a ‘fit-for-all’ approach that seeks to serve the interest of the Nigerian consumers, marketers and the economy
In abolishing petrol subsidy, and pegging petrol price at N135 –N145 per litre respectively, the PPPRA had said ‘‘ This review became imperative in the face of extreme difficulties faced by Petroleum Product Importers in sourcing foreign exchange. To meet the consumption demand of the nation, importers will henceforth be permitted to source for their foreign exchange requirements from the secondary sources.
PPPRA is conscious of the difficulties that Nigerians have been going through in the last few months and to ameliorate this situation, we shall continue to modulate pricing in accordance with prevailing market dynamics thereby ensuring fair value to all Citizens,’’ the statement had said.