Fuel Price: Marketers Target N59 Per Litre
It's all about deregulation, says PPPRA
By Mike Oduniyi and Gloria Achoyamen
Ahead of the two-weeks ultimatum given by Labour for a reversal of the recent increase in fuel prices, indications emerged yesterday that petrol price may be further jerked up to N59 per litre by the end of this month.
The targetted price, which marketers claimed yesterday will be in alignment with the sharp increase in oil prices in the international market, has already received the blessing of the Petroleum Products Pricing Regulatory Agency (PPPRA). The agency argued prices will be arrived at following the dictates of deregulation.
The Nigeria Labour Congress (NLC), which led a coalition of civil society groups to organise a four-day nationwide strike last week to protest the price increase, had stated that the protest will resume in two weeks time if the Federal Government did not revert to the old price of N43 per litre of petrol.
Petrol presently sells for between N52 and N55 per litre. There were commotions however, yesterday following conflicting reports that marketers had already adjusted their pumps to new prices.
THISDAY checks last night however, revealed that fuel marketers still maintained current products prices. For instance, Oando filling station retained petrol price at N52 per litre, diesel at N59.50 a litre and Kerosene at N61.50 per litre. Mobil Oil pegged petrol price at N53 a litre.
Authoritative PPPRA sources said yesterday that a new fuel price regime could not necessarily come into effect for now because marketers imports for the current month were yet to arrive.
According to sources, the PPPRA has already agreed that based on market fundamentals subsisting between October 1 and now, petrol price should be at N59.80 per litre.
"This is what the market fundamentals have shown us. Knowing fully well that deregulation has come into full force, marketers by the PPPRA letter of September 23, are allowed to sell at price that will allow cost recovery," an agency source disclosed.
The PPPRA, however, warned yesterday that it would not hesistate to invite the Department of Petroleum Resources (DPR) to sanction any marketer that raised fuel price for now, since imports had not arrived.
Fears that the Nigerian public may face another round of fuel price increase, as the government unrepentanatly maintained its deregulation policy, emerged last weekend following a sharp rise in oil prices at the international market.
Crude oil prices rose above $55 per barrel as production snags in the Gulf of Mexico and high demand exarcerbate the tight supply situation.
Nigeria, Africa's largest oil producer and the sixth largest in the Organisation of Petroleum Exporting Countries (OPEC), still imports over 70 percent of its fuel required as the four local refineries are still operating far beyond capacity.
The Central Bank of Nigeria (CBN's) monthly report for August, said the bulk of the 13.95 million barrels of crude set aside for domestic consumption for the month, was exported "as the refineries could not process all the crude allocated."
PPPRA officials argued yesterday that even if the refineries, with a combined installed capacity of 445,000 barrels per day, are working perfectly, pump prices of fuel will still have to be raised because the Federal Government is selling the crude to the Nigerian National Petroleum Corporation (NNPC) at prevailing international market price.
In a related development, the Nigerian National Petroleum Corporation (NNPC) has debunked media reports that it planned to introduce a new price regime that will make petrol cost N75 per litre.
In a statement issued in Abuja and signed by the corporation's General Manager, Group Public Affairs Division, Dr. Levi Ajuonuma, it noted that none of its staff ever spoke to any newsman concerning the proposed increase.
"NNPC hereby states categorically that domestic petroleum product prices are based on certain fundamentals. We do not see those fundamentals today as in anyway supporting the quoted domestic price level," the statement said.
He said the pricing of petroleum products in the domestic market is the responsibility of the PPPRA while maintaining that NNPC was under the pricing regime of PPPRA like other marketers.
"No NNPC department is responsible for petroleum products pricing. If indeed that were the case, it is unfortunate as the staff must have intended mischief and therefore does not represent NNPC. It is incredulous that an NNPC staff would make such a statement", he said.
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