According to the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, the review became necessary following the various pricing concerns surrounding the actual cost of a litre of PMS.
This is coming as President Muhammadu Buhari, as well as the Federal Executive Council, had directed the Federal Ministry of Petroleum Resources and the Nigerian National Petroleum Corporation not to allow the price of petrol to go beyond N145/litre.
Kachikwu, who spoke to journalists during the ongoing oil sector stakeholders meeting at the headquarters of the ministry in Abuja, also insisted that the pump price of petrol was N145/litre and stated that the Petroleum Products Pricing Regulatory Agency was working on a new pricing template for PMS.
The minister, however, did not explain how the PPPRA would review the template and keep the cost of the commodity at N145/litre, considering the fact that the landing cost of PMS was currently around N171/litre.
Kachikwu, who only allowed and responded to two questions from journalists, noted that the aspects of the template that had to do with logistics, profit margins for operators, among others, were being reviewed in the pricing template by the PPPRA.
The minister said, “PPPRA obviously develops the templates and helps us to monitor importation into the country. The template has always been an issue because as prices change in the international market, some of these templates get question mark.
“There are two lines as regards this template; there is the actual cost of landing the product, on the template, and there are other ancillary charges that deal with logistics, profit margins for the operators and all of that.
“As part of this committee’s work, we are also reviewing that template to see whether there are things we need to do to help us ensure that we can accommodate sales at the N145/litre window. So, that is also going to be looked into. The PPPRA is working on that and is heading a special committee on it.”
However, marketers wondered how the template would be reviewed to retain the cost of petrol at N145/litre, considering the price of the commodity in the international market.
An oil marketer who pleaded not to be named because he was not authorised to speak on the matter and was part of the stakeholders meeting, said, “We are all in this together and we are watching and working with them on some of these things, but the truth is that I wonder how we can achieve a target of N145/litre for PMS when the template is reviewed.”
He added, “Marketers have asked for incentives, which include suitable forex (foreign exchange) rates, as well as tax holidays and we hope government will act accordingly in order to enable us to begin importation. If this happens, then, hopefully the template will work and petrol price might stay at N145/litre.”
When asked whether independent marketers were now free to sell petrol beyond the regulated rate set by the government, Kachikwu replied, “There isn’t a multiple price fixing environment where people can work outside the umbrella of what has been fixed.
“What we approved is a modulation of between N135/litre and N145/litre. I’m aware that as of this morning, some people sold at N143, while most of the stations sold at N145. But some recalcitrant individuals sold above that and that is where the law will go after them. So there isn’t an authorisation to sell outside the N135/N145 bracket. Nobody is free to set a price above that.”
Kachikwu said rumours about the actual cost of petrol had increased the difficulties encountered by the NNPC in terms of controlling the cost of the commodity.
He said, “There was a statement credited to me that said that price might be increased to N180. No such statement was made; no such plan is intended. I need to clarify this because sometimes some of these rumour mongers all add to the difficulties NNPC had in terms of being able to control price speculation.
“The President’s mandate on this issue is very specific: we are not increasing price from N145. The essence of our meeting (on Thursday) and the essence of the committee meeting still going on, which began few days ago, is to find mechanisms to ensure that fuel queues do not come back to Nigeria.
“It is to also ensure that the product is available at every time for Nigerians; that private marketers who had pulled out from participation, that we deal with their problems so that they can participate effectively in the supply of petroleum products in the country, all within the parameters of N145 per litre pump price.”
Meanwhile, the Peoples Democratic Party has told the Federal Government to forget about hiking the price of fuel from the “already exorbitant” N145 per litre, saying such would not only be criminal, but inhuman and completely unacceptable.
The party said investigations had shown that the Federal Government had been lying to Nigerians on oil-related issues while using the NNPC to bandy about figures with the intention to arrive at government’s predetermined agenda to increase the price of fuel.
The PDP further alleged that the lingering fuel crisis and its attendant black market costs were only a ploy by the All Progressives Congress-led Federal Government to justify their intended hike of the price.
PDP National Publicity Secretary, Mr. Kola Ologbondiyan, in a statement in Abuja on Friday, said the APC-led government had completely become numb to the sufferings of Nigerians to the extent that it no longer cared about imposing more hardship on the people.
He said instead of making the people suffer more, the Federal Government should come out clear on sleaze in the oil sector under its watch, particularly the shady oil subsidy payouts and illegal lifting of N1.1tn worth of crude using unregistered companies.
Recalling that Vice President Yemi Osinbajo had in December informed Nigerians that the NNPC had been paying subsidy on fuel, Ologbondiyan said the Federal Government had refused to tell Nigerians the beneficiaries, the amount involved and who authorised the payment because of the inherent corruption in the deal.