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John Ameh and Okechukwu Nnodim

The House of Representatives on Tuesday faulted the current pricing template for Premium Motor Spirit, better known as petrol, saying that a realistic pump price should not be above N70.04 per litre.

It, therefore, asked the Petroleum Products Pricing Regulatory Agency and Ministry of Petroleum Resources to review the current price template of PMS with a view to bringing down the price of the product.

The landing cost of the product today is N119.74k, while the distribution margin and other costs add up to N18.37k, bringing the total to N138.11k.



However, marketers are allowed to sell petrol in the range of N140 and N145 per litre.

But, on Tuesday, the House, acting on a motion moved by Mr. Abubakar Hassan-Fulata, noted that 90 per cent of the current cost of PMS (N124.34k) was introduced by factors that were unnecessary.

It said the factors were related to transport charges, which were transferred to consumers by the marketers.

Lawmakers argued that removing such unnecessary charges would not affect the profit margin of the marketers if the Federal Government put all the needed infrastructure in place.

In his lead debate, Hassan-Fulata listed some of the charges as lightering expenses, N4.56k; bridging fund, N6.20k; freight, N109.01k; NPA charges, N0.84k; and transport allowance, N3.36k.

He also said the landing cost had inbuilt charges that when removed would not affect the profit margins of the importers and marketers.

The lawmaker cited jetty charges, NIMASA charges, storage charges and retailers’ margin, among others, as costs that could be removed without affecting the profit margin of the marketers.

For instance, he stated that the current bridging charge of N6.20k could be reduced to just N2.00 per litre if the pipelines linking the refineries and the depots across the country were not vandalised.

Hassan-Fulata, “Bridging is supposed to be an annual event only when the refineries are carrying out their turnaround maintenance, which does not exceed three months.

“However, due to the fact that the pipelines linking the various depots have been vandalised or are in a state of disrepair, bridging has remained a permanent feature of the oil industry in Nigeria.”

Similarly, he said the N2.00 built into the price for the maintenance of storage facilities was wasteful as it did not benefit any public-owned depot.

“The fund goes to enrich an ever-growing number of private depot owners, whose facilities have now become the official storage facilities for government products, while government facilities are allowed to decay,” he told the House.

Many lawmakers also faulted the N4.56 lightering charge on the ground that vessels conveying products into the country were not docking directly at the harbours.

The motion for the review of the pump price received unanimous endorsement of members at Tuesday’s plenary, which was presided over by the Speaker, Mr. Yakubu Dogara.

The House directed the Ministry of Petroleum Resources to ensure that the price review was done within eight weeks.

However, petroleum products’ marketers faulted the call for petrol to be sold at N70 per litre.

According to them, the landing cost alone is far higher than N70 at over N128 per litre.

The marketers stated that the challenge in accessing foreign exchange and the fall of the naira against the United States dollar were factors that would make it practically impossible to sell petrol below the regulated rate of N145 per litre.

They told one of our correspondents that the Federal Government still owed them subsidy claims as well as differentials as a result of accrued interests on the debt, running into several billions of naira.

A member of the Major Oil Marketers Association of Nigeria said, “What are their reasons for calling for N70 petrol price? Are they aware of the current economic realities and how the oil and gas sector operates? It is practically impossible at the moment, despite the huge debt being owed us, other factors show that it can’t happen.”

The Group General Manager, Group Public Affairs Division, Nigerian National Petroleum Corporation, Mr. Ndu Ughamadu, said that the oil firm would not react to the demands of the House of Representatives.

This, he said, was because the corporation had yet to get any directive to that effect from the House.

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1993-2001
We can always win provided we are set......
Where was Ambassador when lLateef Saheed was winning back to back

freeman95:
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if them grow finish

opolo ma di PURUUTU

but ambassadors try o, i remember back then way me dey IGANMODE GRAMMAR SCHOOL

them no born ambassadors well then..

they really improved

This is what I heard from my TV

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