… Minister To Constitute Committee To Advice On Price Changes.
The Federal Government has said that petrol to sell for N86.50 per litre at filling stations own by major and independent oil marketers beginning January 1, 2016.
In the same vein, it will sell for N86 at all retail petrol stations owned by the Nigerian National Petroleum Corporation (NNPC).
The new price was made known by the Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Farouk Ahmed in Abuja on Tuesday .
Recalled that the Minister of State for Petroleum, Dr. Ibe Kachikwu, had on December 25, 2015 said that the pump price of petrol would sell below N87 a litre following a price modulation being done.
According to him, “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.”
The new prices, the PPPRA official said are not static but subject to quarterly reviews depending on the market trend.
Ahmed further explained that the price difference between NNPC retail stations and other marketers was due to the difference in their various arrival costs, occasioned by the financing aspect.
He added that while the arrival cost for other marketers is N86.29, NNPC’s arrival cost is N85.93, saying that that “the ideal is to prevent NNPC from profiteering since it imports at a lower cost.”
The new pump price, he stated follows a review of the components of the petroleum products pricing template, taking into cognisance the current market trend which was subsequently approved for implementation by the minister of state for petroleum.
The PPRA Executive Secretary further stated that the components of the pricing template affected by the review are the traders’ margin, lightering expenses, Nigerian Port Authority (NPA) charges, jetty throughput, storage charges, bridging fund as well as retailers, transporters and dealers’ margin.
He stated that the decision to review the old template became necessary to reflect to the price in the market and that the template had remain the same since 2007 except for some minor adjustments, despite changes in the market components.
The breakdown of the revised prices of the components in the new template indicate that traders margin have been reduced from N1.47 per litre to zero Naira, lightering expenses from N4.07 to N2.00, NPA charges from N0.77 to N0.36, Jetty throughput, N0.80 to N0.40 and storage charges, N3.00 to N1.50.
Others are retailers’ margin reviewed from N4.60 per litre to N5.0 per litre, transport, N2.99 to N3.05, dealers’ margin, N1.75 to N1.95 and bridging fund reduced from N5.85 per litre to N4.00 per litre, bringing the ex-depot price per litre of petrol to N77 down from the current N77.66.
Ahmed disclosed that a product advisory committee would be constituted by the Minister of State for Petroleum to advice the PPPRA on price changes.
He also said that 40 million litres daily national consumption was retained in the review, just as he said that oil marketers were aware that the template review had been on and that the review was necessary to update some elements in the pricing which dates back to 2007.