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Petrol to sell at N86.50 in PPPRA’s new template

• NNPC to import 78% of domestic need
• NLC vows to resist fuel subsidy removal

Kachikwu

Kachikwu

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THERE will no longer be a uniform price for petroleum products, according to a new regulatory framework released by the Petroleum Products Pricing Regulatory Agency (PPPRA) in Abuja, yesterday.

Effective January 1 till the end of March 2016 at least, petrol will be sold at N86.50 kobo at retail outlets owned by independent and major marketers while outlets owned or operated by the Nigerian National Petroleum Corporation (NNPC) will sell at N86.

However, the possibility is becoming more likely by the day that Nigerians may witness an industrial strike in 2016 as the Nigeria Labour Congress (NLC) has rejected the planned fuel subsidy removal in 2016.There was no identifiable provision for subsidy payment in the 2016 budget as presented to the National Assembly by President Muhammadu Buhari.

According to Ahmed while unveiling the new template , the 50 kobo differential between marketers and NNPC stations is informed by the lower cost at which the corporation brings petrol into the country.

“Accordingly, the ex-depot price of PMS shall be N77 per litre, while the pump price shall be N86.50 kobo per litre in line with the prevailing market trend. This new price regime is with immediate effect from January 1, 2016. However, NNPC retail stations would sell at N86 per litre. All marketers are hereby advised to adhere strictly to the PPPRA approved ex-depot and pump prices, as the PPPRA in conjunction with relevant government agencies shall enforce compliance”’, he said.

The new template shows that there is no longer a trader’s margin which before now was N1.47 per litre. Lifting expense is now N2 per litre from N4.07 while Nigeria Port Authority charge of 77 kobo is now down to 36 kobo. Jetty throughput charge is now 40 kobo per litre from 80 kobo and storage charge, which was N3 per litre, is now N1.50.

Retailers’ margin has been moved up to N5 from N4.60 kobo while transporters now get N2.99 kobo from N3.05 kobo.

Dealers margin reduced to N1.75Kobo from N1.95Kobo and bridging fund is now N4 per litre down from N5.85Kobo per litre.

Under the new import regime, the NNPC has been allocated 78% of the total three million metric tons volume while marketers are left with 22% for the first quarter allocation.

The PPPRA boss said the paucity of dollars influenced the decision to increase the allocation of NNPC, which hitherto was 40%. He explained: “In allocating the first quarter 2016 import to the NNPC and other marketers, the agency took into consideration retail outlets’ ownership, marketers performance of previous quarterly allocation, as well as the challenges in sourcing foreign exchange. This measure is to guarantee uninterrupted supply nationwide.

Consequently, the NNPC is granted 78% of the total allocated volume for first quarter, while the balance of 22% is to be supplied by other oil marketing companies.”

According to him, the performances of the importers will be reviewed quarterly to ensure non-performing companies are sifted. The PPPRA boss warned that any marketer found selling above the approved price should be appropriately sanctioned by being “excluded from future participation in product importation and revocation of licences.”

In a statement by its General Secretary, Peter Ozo-Eson, in Abuja yesterday, the NLC said the discordant and confusing statements from government officials were meant to confuse Nigerians on the actual stand of government on deregulation.

He said: “In the past few weeks, we have heard discordant tunes from government officials and chieftains of the ruling APC on what the future portends for the prices of petroleum products and the management of the subsidy scheme.  Party chieftains who supported and encouraged the massive protests against subsidy removal in 2012 are now preaching the inevitability of subsidy removal!

‘‘The Honourable Minister of State for Petroleum first announced that come next year, the price of petrol will revert to ₦97 per litre and that subsidy will be phased out. Two days, thereafter, he denied this and stated that what he said was that the price will operate within a band of ₦87 to ₦97 and that this did not mean removing the subsidy. The same minister now says that the price of petrol will now be ₦85 in January signifying the deregulation of the sector.”

While restating the opposition of NLC to subsidy removal, Ozo-Eson hinted that state councils, industrial unions as well as civil society allies had been put on notice just as the National Executive Council (NEC) of the worker’s union had been summoned for the first few weeks of the New Year.

“In the meantime, we wish to restate our opposition, adopted at our Central Working Committee Emergency Meeting of 22nd December, to any attempt by the government to increase the price of or remove subsidy on petrol.

‘‘We reiterate our directive to our state councils and industrial unions to commence the process of mobilisation prior to a meeting of the National Executive Committee to be convened in the New Year,” Ozo-Esan said.

He explained that the vacillations and flip-flops were designed to confuse Nigerians and pave the way for the deregulation of petrol prices through the back door.

“The fact of the matter is that as long as we continue to depend on imported refined products, deregulation and the abandonment of a subsidy scheme will unleash hardship on Nigerians. In any case, according to our laws, the determination of the recommended prices of petroleum products is the responsibility of the Petroleum Products Prices Regulatory Agency (PPPRA).

‘‘By law, the board of PPPRA is made up of stakeholders. None of the contradictory prices the minister is throwing up is a product of the agency. Indeed, the board of the PPPRA has not operated for over two years although we have made repeated demands for the convening of the board,” the NLC scribe noted.

NLC therefore, called on the government to be guided by the rule of law and constitute and convene the board of PPPRA in accordance with the law without further delay

The congress said this would enable the agency to examine and agree a new pricing template based on the realities of today, adding: “Any price unilaterally determined and announced by the minister is in violation of the law.”



2 Comments
  • Joseph

    What is this when the oil price at the International Market is crashing. By now this administration should be talking about crashing the PMS to N50 and do likewise to kerosene and diesel.

  • emmanuel kalu

    NLC is not looking out for the interest of the people or worker. Nigerian’s are paying upwards of 120 for fuel, we are wasting billions on subsidy at the expense of other infrastructure. NLC should be fighting for the use of the saving from subsidy to do something meaningful for the people and the country. subsidy must end, we must deregulate the sector and allow investors to build any kind of refineries. oil price is not going up anytime soon, we need to start adding value and be an export nation for refined oil.

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