The pump price of petrol may sell for less than N87
per litre before the end of the first quarter of 2016,
latest findings from the Nigerian National Petroleum
Corporation have revealed.
This is coming as the corporation also announced
that the Kaduna Refining and Petrochemical
Company would start producing petroleum products
beginning from today (Saturday).
According to the NNPC, the current pricing template
for petrol, which was prepared by the Petroleum
Products Pricing Regulatory Agency, contains
significant inefficiencies that should be reviewed.
The corporation’s Group General Manager,
Corporate Planning and Strategy, Mr. Bello Rabiu,
told journalists in Abuja on Friday that going by the
fall in the price of crude oil, it was important to
consult relevant stakeholders in order to produce an
adjusted template.
Rabiu said consultation with stakeholders was to
negotiate and reduce some of the costs associated
with the importation of petrol, adding that the
government had the target of reducing the amount
charged for logistics and distribution margin on
every litre of premium motor spirit consumed in
Nigeria.
The GGM was affirmative that the adjusted template
would surely have a considerable reduction in the
pump price of petrol when it is completed before the end of the first quarter of next year, stressing that when this is achieved, there would be no need for subsidy as the import price of PMS would have
reduced considerably.
Rabiu said, “We are engaging industry stakeholders
to review the PPPRA template that actually drives the
cost of importation. This is because the actual cost of PMS minus the retail price of the product is subsidy.
So if the cost falls to N80 per litre today, then where
will the need be for subsidy? If the cost is less than
the current retail price of N87 then it means there is
no subsidy.
“So we are looking at the template to have it reviewed considering the realities on the ground now in the sector. What if after the review we are able to take away about N10 from this current template, which today puts the cost of petrol at N91.52 litre, then it means the cost may come down to around N82 per litre.
“That is why we said there is no need for subsidy in
the 2016 budget. We say this because we know that
the price of crude oil will not go so high in the next
12 months because of the high level of saturation in
the market. So as soon as it is appropriate, we will
announce a new price for PMS.”
Bello stated that the adjusted template would be
used subsequently to modulate prices down or up on a periodic basis if required, adding that if oil prices continue to fall and inefficiencies are eliminated within the template, there will surely be negative subsidy.
The negative subsidy, he said, shall be remitted to the Petroleum Support Fund in line with the current
PPPRA guidelines.
He said, “The savings under such a regime could be
domiciled in the PSF as a buffer for future subsidy (if
any) that may arise during high oil price regime or
invested by the industry in supply and distribution
efficiency improvement projects such as decongestion of Apapa area, Single Point Monitoring
in Port Harcourt and Warri, complimentary rail
services, inland waterways, etc.”
On the commencement of production at the Kaduna
refinery, the Managing Director, Pipelines Product
Marketing Company, Mrs. Esther Nnamdi-Ogbue,
said crude oil had been pumped to the facility from
Warri.
She stated that some pipelines had started pumping
crude oil and refined products, adding that petrol
had been pumped from Atlas Cove to Mosimi depot
using the pipelines connecting both facilities
pipelines.
Nnamdi-Ogbue also assured Nigerians that the NNPC had enough petrol to keep the country wet for at least 12 days, and urged motorists and petrol seekers to avoid panic buying.
