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 that
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.”
Credit: Punch
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