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Petrol Should Sell For N151.87/Litre, Marketers Insist

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Petrol

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.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Government

Sanwo-Olu Orders Full Reopening of Markets

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Coronavirus

Governor of Lagos State Orders Full Reopening of All Markets

Governor Sanwo-Olu of Lagos has ordered the full reopening of markets in the state after a report showed new cases of COVID-19 have subsided.

The governor ordered the full reopening of both the food markets and non-food markets across the metropolis.

Dr. Wale Ahmed, the Commissioner for Local Government and Community Affairs, disclosed this in a statement issued on Tuesday.

He said the governor took the decision to further deepen trade and commerce and ease the hardship of recent happenings.

It should be recalled that the markets were shut due to the outbreak of ravaging COVID-19 pandemic in March before they were partially reopened for activities in May.

The governor, however, urged all traders to observe all safety protocols in order to prevent a possible resurgence of COVID-19 in the state.

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Government

Private Sector Coalition Against COVID-19 (CACOVID) Speaks on Looted Palliatives, Explains Delay

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looted palliatives

Looted Palliatives: Private Sector Coalition Against COVID-19 (CACOVID) Speaks

Private Sector Coalition Against COVID-19 (CACOVID) has spoken on the recent actions of criminals and thugs who hijacked the #EndSARS protest and looted warehouses where COVID-19 palliatives were kept for distributions.

The group refuted claims that the stolen items were hoarded for certain people instead of distribution to the vulnerable they were meant for. This is despite the fact that some of the palliatives were already rotten by the time criminals broke into the warehouses.

Some of the looters, who spoke with the press, said a sizeable number of the items were already rotten and destroyed by rodents, while one of the lawmakers tasked with distribution claimed he planned to distribute the items on his birthday. A statement that angered many Nigerians.

However, in a statement issued on behalf of the group by Osita Nwanisobi, the Acting Director of Corporate Communications, CBN, on Monday, CACOVID said due to the huge size of the items meant to be distributed, the complex process involved in manufacturing, packaging and the eventual distribution to 2 million most vulnerable families across the 774 local government in the country, the group agreed to conduct the supply in stages, especially given locked down imposed by the Federal Government during the period.

The statement reads, “Members of the Private Sector-led Coalition Against COVID-19 (CACOVID) wish to call for calm, amidst the looting of COVID-19 palliatives meant for distribution in various State Government warehouses across the country.

“The Coalition is deeply concerned by the recent events and is urging those involved in the wanton destruction of public and private property to immediately desist from these raids, in order to allow the States to proceed with a peaceful and fair distribution of these palliatives to the neediest and most vulnerable in our society.

“Over the past few months, the private sector, through CACOVID has been working with governors, the FCT Minister, and the Nigerian Governors’ Forum (NGF) to procure, deliver, and distribute these food relief items to almost 2 million most vulnerable families (over 10 million Nigerians) across the 774 local government areas of the country, as part of the private sector’s support towards the national response to the COVID-19 pandemic.

“The sheer scale of this nationwide food programme and the timing of the orders and deliveries, which coincided with the lockdowns and reduced movement across the country, compelled CACOVID to roll out distribution in a staggered manner.

“The very large size of the order and the production cycle required to meet the demand caused delays in delivering the food items to the states in an expeditious manner; hence, the resultant delay in delivery of the food palliatives by the state governors.”

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Government

Makinde Directs Schools to Reopen After #EndSARS Protest

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education

Schools to Reopen After #EndSARS Protest, Says Governor Makinde

The Executive Governor of Oyo State, Seyi Makinde, has directed schools across the Ibadan metropolis to resume normal activities immediately after the #EndSARS protest.

Mr Olasunkanmi Olaleye, the commissioner for education, Oyo State, disclosed this in a statement issued on Sunday in Ibadan.

According to Olaleye, the directive was after a careful review of the situation in the Ibadan metropolis as promised by Governor Makinde in a state broadcast on October 20.

This was after the governor ordered the closure of all schools, private and public, in the Ibadan metropolis for three days and promised to review the situation on October 23.

Olaleye said the governor thanks the youths who have been cooperating with security operatives in the state to ensure peace and order.

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