Finally, Petroleum Minister speaks; says no increase in pump price of petrol

It’s been a confusing day in the country over the pump price of Premium Motor Spirit (PMS), otherwise known as petrol. It is not clear what exactly triggered the panic, but accusing looks are in the direction of the Petroleum Products Pricing Regulatory Agency (PPPRA) which earlier gave a guiding price for March of N211.11 per litre for PMS on its website, but quickly pulled it down as panic and confusion set in.

But that has not removed the queues that set in at fuel filling stations in parts of Abuja and Lagos. Even an assurance by the Nigerian National Petroleum Corporation (NNPC), the sole importer of petrol, that there was no price increase did not still the panic and confusion.

It is hoped that a statement by Minister of State for Petroleum Resources, Mr. Timipre Sylva, may do the magic, though many believe the kite flown by government, through PPPRA, is just days or weeks away, because of the rising price of crude in the international market.

Said Sylva: :”Dear Nigerians, you are by now very aware of the news trending that the federal govt has increased the price of petrol to N212.6 per liter.

“Irrespective of the source of that information, I want to assure you that it is completely untrue. Neither Mr. President who is the Minister of Petroleum Resources, nor my humble self who deputise for him as Minister of State, has approved that the pump price of petrol should be increased by one naira. I would therefore urge you to disregard this misleading information.

“You are all aware that for the past few months the govt has been in consultation with organized labour to find the least painful option to respond to the global rise in the price of crude, which in turn has inevitably led to increase in the price of PMS. It is unthinkable that govt would unilaterally abandon these discussions and act in the manner suggested by the information under reference.”

According to the PPPRA, based on the average costs of imported petroleum products, an appraisal of the pricing template put the average price per ton of the petrol at about N169.22 per litre, while the average freight rate cost (North-West Europe to West Africa) of about $21.63 per ton, or N6.51 per litre. This translates into an expected ex-coastal price of about N175.73 per litre.

Additional analysis of the component charges in the pricing model indicated that average littering expenses stood at about N4.81 per litre; Nigerian Ports Authority (NPA) charge N2.49 per litre; NIMASA charge N0.23 per litre; Jetty Thru put of N1.61 per litre and Storage charge of N2.58 per litre and average finance cost of N2.17 per litre, translating to an expected landing cost per litre of N189.61.

The template threw up an expected ex-depot price for wholesale products marketers at N206.42 per litre given all other component charges factored into the price computation.

The charges include wholesale margin of N4.03 per litre; administration charge of N1.23 per litre; transporters’ allowance (NTA) of N3.89 per litre; Bridging Fund cost of N7.51 per litre and Marine transport average (MTA) of N0.15 per litre.

Available statistics further showed that the addition of retailers’ margin of N6.19 per litre brings the expected retail price on lower band to N209.61 per litre and expected retail price at the upper band to N212.61 per litre.

PPPRA explained that the guiding price of PMS was calculated at an average of 211.11 per litre.

However, in a statement later, embattled agency said a litre of petrol still sells for i
N165 as there is no fuel price increase.

Its Executive Secretary, Abdulkadir Saidu said speculations of an increase were false.

His words: “The PPPRA by this release wishes to state clearly that the Guiding Prices posted on our website was only indicative of current market trends and do not translate to any increase in pump price of PMS. However, publications by the media to this effect have been misconstrued and thus misleading…

“The Agency wishes to remind the general public of the introduction of the Market-Based Pricing Regime for PMS Regulation 2020 as gazetted by the Federal Government. Based on this regulation, prices are expected to be determined by market realities in line with the dictates of market forces.

“One of the conditions for the implementation of the Market-Based Pricing Regime for PMS Regulation 2020 is the monthly release of Guiding Price to reflect current market fundamentals.

“The PPPRA in line with its mandate to maintain constant surveillance over all key indices relevant to pricing policy, monitors market trends on a daily basis to determine Guiding Prices.

“The Agency is not unaware of the challenges with the supply of PMS due to some concerns leading NNPC to be the sole importer of PMS. PPPRA is also mindful of the current discussion going on between the government and the Organised Labour on the deregulation policy. While consultation with relevant stakeholders is ongoing, PPPRA does not fix or announce prices and therefore there is no price increase. The current PMS price is being maintained while consultations are being concluded.

“Even though market fundamentals for PMS in the past few months indicated upward price trends, the pump price has remained the same and we are currently monitoring the situation across retail outlets nationwide.

“While assuring the public of adequate products supply as the average PMS Day-Sufficiency as of March 11, 2021 is over 35 days, the PPPRA pledges to continue to perform its statutory function in ensuring that the downstream sector remains vibrant as well as support both government and members of the public.”