Though attempts have been made to assure Nigerians that there are no plans to increase the pump price of Premium Motor Spirit, popularly referred to as petrol, The PUNCH has gathered that the actual price at which the product should sell at filling stations is N151.87 per litre.

This “realistic” price is more than the maximum N145 per litre fixed by the Federal Government on May 11, 2016 when it liberalised the downstream oil sector, marketers with knowledge of the market and the pricing mechanism told one of our correspondents on Tuesday.

This, they said, was basically due to the continued scarcity of the United States dollar, adding that the true price of petrol was N151.87 litre, judging by the current ex-depot price of the commodity.

In Tuesday’s exclusive report by The PUNCH on a looming hike in petrol price, dealers explained that the ex-depot price of the product was N133.28 per litre and that the marketers were doing their best to manage the situation.

They stressed that the dollar hit an all-time high last week, as it exchanged for N400 at the parallel market, and called for urgent steps to address the situation in order to sell the PMS at the approved rates.

In a move to avert a price increase, it was learnt that the government conveyed a meeting of stakeholders in the downstream oil sector on Tuesday, which was held at the headquarters of the Petroleum Products Pricing Regulatory Agency in Abuja.

One of our correspondents gathered that participants at the meeting included officials of the Nigerian National Petroleum Corporation, Ministry of Petroleum Resources, the PPPRA, Major Oil Marketers Association of Nigeria, Independent Petroleum Marketers Association of Nigeria, Depot and Petroleum Products Marketers Association, Nigeria Association of Road Transport Owners, as well as other concerned persons.

Explaining that the actual cost of the PMS had increased beyond the N145 per litre fixed rate, an oil dealer who attended the meeting stated that when the distribution margin for petrol was added to the ex-depot price, the real cost of the commodity was N151.87 per litre.

The official, who spoke on condition of anonymity because of the sensitive nature of the subject, said, “Since the ex-depot price is around N133.5 per litre and the selling price is N145 litre, when you remove the ex-depot cost from the selling price, you’ll get about N12. Now, from this N12, consider the distribution margin and other costs from the depot; if all these costs are less than N12, then the marketers are making profits and there will be no complaint.

“But if the reverse is the case, then they have a complaint. I want you to find out what is the marketers’ margin, transporters’ margin, bridging fund, Petroleum Equalisation Fund, administrative charges and more. When you add all these together, you will realise that truly, the marketers are doing all they can to hold the pump price at the N145 per litre band.”

Investigations by our correspondents from the PPPRA showed that when the various costs highlighted by the oil dealer were added together, the result was a margin of N18.71. By adding this to the N133.5 ex-depot price, the final figure is N151.87.

For specifics on the distribution margin for every litre of petrol consumed across the country, retailers charge N6; transporters’ allowance is N3.36; bridging fund, N6.2; dealers’ charge, N2.36; marine transport average, N0.15; and admin charge, N0.3; making a total of N18.71.

When asked to state how the marketers had been coping and who is paying the extra considering the fact that some stations were even dispensing petrol at rates lower than N145 per litre, another dealer said, “We met with the government and we made it clear to them that the situation is precarious. The competition has made many of us do things that may be considered unusual in some sense, all in a bid to stay afloat.

“But for how long can this be sustained? The competition has made the marketers to come up with ingenious ways to source forex, which is why some stations still sell below the N145 per litre price in order to attract customers and make turnover in bulk. But the truth is that this is unhealthy and cannot be sustained.”

On the meeting between government officials and the marketers, a senior official of the Petroleum Resources ministry stated that the government might either subsidise the product again or consider some form of concession to the marketers with respect to the cost of the dollar.

The official said, “The issue of forex has been a challenge to both the government and the oil marketers. All of a sudden, the dollar skyrocketed to about N400 and the product we are concerned with here is an international product. So, if they are bringing in the product by buying dollar at N350, then it is obvious that they are really working hard to remain in business.

“For if we are in a truly deregulated market environment, then the price of the product should have increased beyond N145 per litre; there is no doubt about that. Meanwhile, there was a highly confidential meeting between the management of the PPPRA and stakeholders in the sector on this matter.

“I may not be able to tell you the resolutions that were reached concerning the issue of pricing of petroleum products, but the body language of those who participated in the meeting suggests that the government may be considering some form of concessions to the oil marketers as it did for the Muslim pilgrims. We all know that the government cannot afford to increase petrol price again, not at this time.”

The Group Managing Director, NNPC, Maikanti Baru, told journalists in Abuja on Tuesday that he had not received any directive to increase petrol price.

He explained that the corporation had enough stock and that all was being done to meet the forex needs of the marketers.

However, the Nigeria Union of Petroleum and Natural Gas Workers and the Trade Union Congress of Nigeria have described the news of a looming increase in the pump price of petrol as unwelcome and worrisome.

The Chairman, NUPENG, Lagos Zone, Alhaji Tokunbo Korodo, said, “It is a bad idea to say petrol price will increase again. Nigerians will not welcome any further increase. Truly, we saw the foreign exchange crumbling on daily basis, but it shouldn’t be an excuse.”

He said if the government could subsidise forex for pilgrims, it should also be prepared to subsidise whatever increase that would come from any crisis the marketers might be having concerning the fuel price.

Korodo said, “Government should not take us for a ride because nobody is going to take it the way the marketers are thinking.

“Marketers are telling us what the government is planning to do, because on their own, they cannot just increase the price. They are only playing the script of the government and we are not going to succumb to such blackmail.”

The Chairman, TUC, Rivers State Chapter, Mr. Chika Onuegbu, said the government had made it clear that1 the price of petrol would not be more than N145 per litre.

He said, “And even at that point when the government made the agreement, we knew that it was making excess profits and it admitted to that fact. So, the government should be able to cushion the impact of the forex challenge marketers are facing.

“I think the government had an understanding with the marketers regarding the exchange rate that they will apply for importing their products.”

Onuegbu said it would be unfair to Nigerians for the price to be increased, adding, “We were told that at N145, things would be easy for the marketers.

“When they (marketers) were making super profits, they didn’t tell anybody. That was why as soon the price was increased, there was fuel in every filling station. The problem now is that they are not making as much profit as they used to make; therefore, they must punish Nigerians.”