Marketers have said with the current realities in the global crude oil markets, the price of Premium Motor Spirit (petrol) in Nigeria should be between N185 and N200 per litre, unless the government wants to subsidise the product, ’FEMI ASU reports

The upturn in global oil prices last week has again brought to the fore marketers’ concerns over the non-implementation of the full deregulation of the downstream petroleum sector as the pump prices of petrol have been left unchanged for more than two months.

Top officials of two major marketers’ associations who spoke with our correspondents on Saturday said the continued increase in oil prices had brought back petrol subsidy.

The PUNCH had reported on January 11 that the sustained increase in global crude oil prices had pushed up the landing cost of imported petrol closer to the current pump prices of the product in Nigeria, and appeared to have triggered a return to petrol subsidy era.

Since November 13, 2020 when the pump prices of PMS were last increased in the country, the price of the international oil benchmark, Brent crude, has increased by 43 per cent, rising from $41.51 per barrel to $59.34 per barrel on Friday.

Fuel marketers had in December expected another upward adjustment of PMS prices to reflect the further rise in crude oil prices, which closed at $51.22 per barrel on December 31.

However, a N5 reduction in petrol price, effective December 14, was announced by the Federal Government – a development that left them reeling in shock and questioning the deregulation of petrol price.

Crude oil price accounts for a large chunk of the final cost of petrol, and the country has continued to spend so much on petrol imports for many years amid low domestic refining capacity.

According to the marketers, the pump price of petrol should be between N185 and N200 per litre.

The product is currently sold at between N160 and N165 per litre at many filling stations in Lagos.

The Executive Secretary/Chief Executive Officer, Major Oil Marketers Association of Nigeria, Mr Clement Isong, said, “Members of my association are operating in Nigeria and care about the long-term sustainability of the industry as well as the country itself.

“So, we know that depending on what exchange rate you use, the pump price should be between N185 and N200 per litre.

“For as long as we continue to sell the product at what we are currently selling it, then somebody is bearing the cost of subsidy, and the country really cannot afford subsidy at this time.”

He said the demand for petrol had increased significantly in the country, adding that the security of supply had been threatened.

Isong said smuggling might have resumed because of the significantly different prices across the borders, which were recently opened.

“So, we need to completely restructure our entire supply chain. We need to reach a place where, if deregulation takes effect, refining will resume in Nigeria. We need to find a way of making sure that Nigerians benefit from deregulation. That, I believe, is what the discussion must be.”

The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.

Private oil marketing companies have continued to lament that their inability to access foreign exchange at the official rates has hampered efforts to resume petrol importation.

The PUNCH reported on Friday that the Federal Government had announced the commencement of discussions with representatives of the labour movement on how to raise the freight rate from N7.51 per litre to N9.11 per litre.

Freight is one of the elements that make up the landing cost of the petrol imported into the country.

The National Operation Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, told our correspondent that the implementation of the new freight rate would lead to petrol price increase.

He said, “Already, we are back to subsidy, and from the information I have which is confirmed, the Federal Government is subsidising about N1.8bn per day because 70 million litres are being pumped out every day now because the borders have been opened; I don’t know where the fuel is going.

“Government cannot afford subsidy, and there is no subsidy in the budget. So, the market fundamentals have to come to force now.

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“Based on $56 per barrel of crude oil, our pump price should be about N186 to N190. But now that oil price has even gone to $59, then pump price should not be less than N200 per litre. There is no way Nigerians can avoid petrol price increase.”

Osatuyi said the increase in oil prices had already pushed up the pump prices of diesel and kerosene in the country.

The Minister of State for Petroleum Resources, Timipre Sylva, had said in September last year that the Federal Government had stepped back in fixing the price of petrol, adding that market forces and crude oil price would determine the cost of the product.

The Federal Government removed petrol subsidy in March 2020 after reducing the pump price of the product to N125 per litre from N145 on the back of the sharp drop in crude oil prices. The price reduction lasted till June.

Nigerians saw increases in the pump prices of petrol in four months, rising from N121.50-N123.50 per litre in June to N140.80-N143.80 in July, N148-N150 in August, N158-N162 in September and N163-N170 in November.

Apart from the increase in global oil prices, the devaluation of the naira last year also led to a significant rise in the cost of imported petrol.

If the pump price of petrol is left unchanged amid the rise in oil prices, it means the NNPC would again bear the latest subsidy cost on behalf of the government as it did for several years before its removal last year.

In July 2020, Sylva said in a statement that the Federal Government had reached a conclusion that it could no longer bear the burden of petrol subsidy.

“After a thorough examination of the economics of subsidising PMS for domestic consumption, the Federal Government concluded that it was unrealistic to continue with the burden of subsidising PMS to the tune of trillions of naira every year, more so when this subsidy was benefiting in large part the rich, rather than the poor and ordinary Nigerians,” he said.

According to him, deregulation means that the government will no longer continue to be the main supplier of petroleum products but will encourage the private sector to take over the role of supplier of the products.

It’s premature to say we’re subsidising petrol – NNPC

The Group General Manager, Group Public Affairs Division of the Corporation, Dr Kennie Obateru, told our correspondent on Sunday that whatever would be done regarding petrol pump price would be based on the advice from the Petroleum Products Pricing Regulatory Agency.

“The point is that NNPC is the only one importing the product (petrol) for now. We are looking forward to other marketers joining in the importation of the product, so that the burden will not just be on NNPC,” he said.

Asked if the NNPC had started bearing subsidy cost, he said, “I think it would be premature to say because it has to be based on whatever PPPRA works out as to the pricing. The market is already deregulated.”

He added that the desire of government was to have a fully deregulated market.

Source: https://m.punchng.com/Business/Petrol-price-may-hit-N190-as-oil-nears-$60

Wonder why we cannot just face reality and DEREGULATE.

Niger is exporting fuel because they sell fuel at N377 per liter...and as such they have the profits to fix their refienry and upgrade it if need be,

Nigeria is subsidising fuel...with our limited dollar earning, and even then, we are finding it difficult to keep up the subsidising because the oil price is not high enough for us to earn the revenue to do so.

Deregulaiton is the answer...since 1993.

Key points from the article

The upturn in global oil prices last week has again brought to the fore marketers’ concerns over the non-implementation of the full deregulation of the downstream petroleum sector as the pump prices of petrol have been left unchanged for more than two months.

Top officials of two major marketers’ associations who spoke with our correspondents on Saturday said the continued increase in oil prices had brought back petrol subsidy.

Still paying subsidy, but wait...

The National Operation Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, told our correspondent that the implementation of the new freight rate would lead to petrol price increase.

He said, “A[b]lready, we are back to subsidy, and from the information I have which is confirmed, the Federal Government is subsidising about N1.8bn per day because 70 million litres are being pumped out every day now because the borders have been opened; I don’t know where the fuel is going[/]
“Government cannot afford subsidy, and there is no subsidy in the budget. So, the market fundamentals have to come to force now.

‌
“Based on $56 per barrel of crude oil, our pump price should be about N186 to N190. But now that oil price has even gone to $59, then pump price should not be less than N200 per litre. There is no way Nigerians can avoid petrol price increase.”

At the bolded is why we should not be subsidisng fuel, and why we should let the marketers determine the price.

But love for cheap fuel is what got us here...(and is one of the reasons why Nigerians even voted APC self).

Also, fuel smuggling is happening...because in neighbouring countries, they sell fuel above N300 per liter...so why won't someone smuggle fuel out of the country and make a profit?

Yet, we won't face reality and remove subsidy.

Who let the dog out?

I don't care anymore. If they like, they should increase it to ₦910 per litter. Nothing in this country will give me headache again.

Petrol don turn crypto, wey we go dey expect all time high.

Useless government

Let's go there.

We are going to N200 per litre....sai Baba

...


My people we need a leaders with fresh brain not the ones with Agege bread brain.


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Hope the darling daddy chanter is seeing what his darling daddy’s olodo leadership is causing his darling country.

What an irony of a country with massive crude deposits and multi refineries yet cannot refine crude for her own consumption.

Make no mistake about it, the entire globe thinks Nigerians are crazy...... and we are. Someone up there is making excuses already for this nonsense.

I think the masses are already close to fighting for their lives or die of outright hunger.

Sai Baba
Sai Change
At least we at vulturebbqrillz will be buying fuel at 50 naira per litre to grill our vultures while the rest of Nigerians will be buying at 190 naira.

Mtsheew

I will prefer it's doubled or tripled sef...maybe enough suffering will push Nigerians to have sense and do proper revolutionary protest, not the Endsars some old fools refuse to join cos they think the youth are selfish and senseless

We should be grateful for once in this country, Buhari is really trying.

If it's during the regime of the otuoke drun.kard. , fuel was selling for over #780.

Time to buy a horse for daily commuting.

My comment on front page

234GT:
Time to buy a horse for daily commuting.

Horse is more expensive than car in terms of upkeep.

Biko why


.

FreeSpirited:
I will prefer it's doubled or triple sef...maybe enough suffering will push Nigerians to have sense and do proper revolutionary protest, not the Endsars some old fools refuse to join cos they think the youth are selfish and senseless

abi na,protest that will involve everybody

ghen ghen

FreeSpirited:
I will prefer it's doubled or triple sef...maybe enough suffering will push Nigerians to have sense and do proper revolutionary protest, not the Endsars some old fools refuse to join cos they think the youth are selfish and senseless

The problem is, if we reduce fuel to N40 per liter...which is what you want am sure...the marketers and NNPC won't earn enough of a profit to even import the fuel they want to sell, and at the end of the day, there would be massive scarcity and fuel would be sold on the black market for N600 or more per liter.

Plus, it would have a negative effect on our economy. And we would drain our forex revenues sustaining low oil prices

Get your affordable kids educational android tablets.

Please go through my threads for pictures, specifications, functions and contact

Soon to be #200 per liter
That's what this present clueless FG wants.
Population 200million+
PMS price #200+ per litre.
SMH

We are in a very big mess with these crop of leadership personnel in all strata of governance.

I'm surprised Occupy Nigeria Group Members are docile even with all these occurencies ...i expect by now they'll take to the street as per their resolve back then on fuel hike issues
Only in Nigeria you'll see activists change like chameleon!!!
Proactivity Leads To Productivity !!!!

@SeniorWriter

If you no get money, buy 4 cylinder car jeje

Buhari scammed over 180 million people. Choi. The economy is getting worse by the day

Seniorwriter:
Soon to be #200 per liter
That's what this present clueless FG wants.
Population 200million+
PMS price #200+ per litre.
SMH

We are in a very big mess with these crop of leadership personnel in all strata of governance.

Proactivity Leads To Productivity !!!!

@SeniorWriter

Niger is poorer than we are, and they pay N377 per liter for fuel

As a result, they have the profit to repair and maintain their single refinery effectively.

Not like Nigeria, where we import fuel at above N200 per liter, and waste millions paying subsides to keep prices low. Money that couldd have been used for....refinereis.

Imagine an oil producing state being adversely affected by an increase in oil prices
So unlike before, increase in oil prices should no longer come as good news to Nigerians, because while government revenue is increasing, expenditure is equally increasing for the populace.
Even the crude that is the one good eye we have is now shooting us in the foot

It's much expected, Buhari is a failure, anyday, anytime.

I know the price would definitely get to 200 before the end of the year

ArmaniUhuru:
Hope the darling daddy chanter is seeing what his darling daddy’s olodo leadership is causing his darling country.

lolxxxxx hahahaha I swear guy u captured it well. darling daddy chanters lolxxxxx