Petrol to sell for N86/litre from January, 2016 – FG

The Federal Government, yesterday, stated that effective January 1, 2016, Premium Motor Spirit, otherwise known as petrol, would be sold at N86 per litre by the Nigerian National Petroleum Corporation, NNPC Retail stations, while other oil marketers would sell at N86.50 per litre.

The Nigerian Labour Congress said, however, that it would resist with all its might, any attempt to remove fuel subsidy.

Speaking to newsmen in Abuja, Executive Secretary of the Petroleum Products Pricing Regulatory Agency, PPPRA, Mr. Farouk Ahmed, also announced the first quarter 2016 PMS import allocation of three million metric tonnes to the NNPC and other oil marketers.

On the review of the price of petrol, Ahmed said the reduction in the price of the commodity was due to an implementation of the revised components of the Petroleum Products Pricing Template for PMS and household kerosene.

According him, the revised template, which would be reviewed on quarterly basis and which would soon be presented to oil marketers, is geared towards ensuring an efficient and market-driven price that would reflect current realities.

He said: “Since 2007, while crude oil price had been moving up and down, the template remained the same. This had made it necessary for us to introduce a mechanism whereby the template would be sensitive to the price of crude oil.

“However, the template is not static, as there would be a quarterly review and if there is any major shift, the Minister of State for Petroleum Resources would be expected to call for a review, either upward or downward, depending on the market condition.

“If there is no major shift, that is, if there is a marginal change, the price would continue from January to March, 2016. In addition, there would be a Product Pricing Advisory Committee that would be set up to advise the PPPRA concerning movements in the price of crude oil.”

He said the NNPC would sell lower than other oil marketers, due to the fact that it is cheaper for it to import, compared to the independent and major oil marketers.

He listed the major components affected by the review in the pricing template to include: Traders Margin, Lightering Expenses, Nigerian Ports Authority (NPA) Charges, Jetty Throughput and Storage Charges, as well as Bridging Fund. Other components include: Retailers, Transports and Dealer margins.

Giving a breakdown of the revised template, Ahmed disclosed that Trader’s margin, which is the amount paid to traders for bringing the commodity into Nigeria, has been eliminated, from N1.47 per litre previously; Lightering Expenses reduced from N4.07 per litre to N2 per litre; NPA, reduced from N0.77 to N0.36 per litre; while Jetty Throughput and Storage charges were reduced from N0.80 and N3, to N0.40 and N1.50 per litre respectively.

On the other hand, Retailers margin was increased to N5 per litre from N4.60; Transporters rose to N3.05 from N2.99; dealers margin was reviewed upward to N1.95 from N1.75, while bridging fund dropped to N4 per litre from N5.85.

To this end, Ahmed put the Ex-depot price of PMS at N77 per litre, compared to N77.66 per litre; open market price would be N86.29 for oil marketers and N85.93 per litre for the NNPC, while he stated that pump price for oil marketers would be N86.50 per litre and NNPC, N86 per litre.

On the issue of PMS import allocation to the NNPC and other marketers, Ahmed said that the PPPRA, in a bid to guarantee uninterrupted fuel supply nationwide, took into consideration the issue of retail outlets ownership, marketers’ performance of previous quarterly allocation, as well as the challenges in sourcing foreign exchange.

He lamented the fact that in the fourth quarter of 2015, the NNPC was the major supplier of PMS in Nigeria, as it supplied over 111 per cent of their allocation, major marketers supplied only about 36 per cent of their allocation, while independent marketers and Depot and Petroleum Products Marketers Association, DAPPMA, supplied only about 38 per cent of their allocations.

He said: “Consequently, the NNPC was granted 78 per cent of the total allocated volume for the first quarter of 2016, while the balance is to be supplied by other oil marketing companies.

“Marketers are required to note that there shall be a mid-quarter review of performance where volumes of non-performing marketers shall be withdrawn and reallocated to performing marketers.

NNPC Mega Filling Station now selling at N138 per litre in Abuja yesterday.

“Furthermore, the PPPRA wishes to reiterate that consideration for participation in future allocations shall be on the basis of attainment of 100 per cent performance in first quarter 2016.

“Accordingly, the PPPRA hereby warns that any marketer found selling above the PPPRA approved price shall be appropriately sanctioned. These include, but not limited to, exclusion from future participation in product importation and revocation of licences.”

We will resist fuel subsidy removal —NLC

Meanwhile, Nigeria Labour Congress, NLC, yesterday, said it was aware of the discordant tunes by government officials and All Progressives Congress, APC’s chieftains on petroleum products and management of subsidy scheme, insisting that it would resist any attempt to remove fuel subsidy with all its might.

NLC said it had since December 22, directed all its affiliates to commence mobilization of members for eventuality, noting that workers and indeed Nigerian masses would not accept any removal of subsidy through the back door.

In a statement by Dr. Peter Ozo-Eson, General Secretary to the Ayuba Wabba faction of NLC, congress said: “In the past few weeks, we have heard discordant tunes from government officials and chieftains of the ruling APC on what the future portends for the prices of petroleum products and the management of the subsidy scheme. Party chieftains who supported and encouraged the massive protests against subsidy removal in 2012 are now preaching the inevitability of subsidy removal! The Minister of State for Petroleum first announced that come next year the price of petrol will revert to N97 per litre and that subsidy will be phased out. Two days after, he denied this and stated that what he said was that the price will operate within a band of N87 to N97 and that this did not mean removing the subsidy. The same minister now says that the price of petrol will now be N86 in January, signifying the deregulation of the sector.

“These vacillations and flip flops are, in our view, designed to confuse Nigerians and pave the way for deregulation of petrol prices through the back door. The fact of the matter is that as long as we continue to depend on imported refined products, deregulation and the abandonment of a subsidy scheme will unleash hardship on Nigerians. In any case, according to our laws, the determination of the recommended prices of petroleum products is the responsibility of the Petroleum Products Prices Regulatory Agency (PPPRA). By law, the board of PPPRA is made up of stakeholders. None of the contradictory prices the minister is throwing up is a product of the agency. Indeed, the board of the PPPRA has not operated for over two years although we have made repeated demands for the convening of the board.”

According to the statement: “We call on the government to be guided by the rule of law and constitute and convene the board of PPPRA in accordance with the law without further delay. This will enable the agency to examine and agree a new pricing template based on the realities of today. Any price unilaterally determined and announced by the minister is in violation of the law.

“In the meantime, we wish to restate our opposition, adopted at our Central Working Committee Emergency Meeting of 22nd December, to any attempt by the government to increase the price of or remove subsidy on petrol.”