* Uniform price expected after marketers parley with FG
Uncertainty has beclouded the downstream segment of the oil and gas industry following a slight increase in the ex-depot price of Premium Motor Spirit (PMS) aka petrol.
The Petroleum Products Marketing Company (PPMC), a downstream subsidiary of the Nigerian National Petroleum Corporation (NNPC), had on Tuesday fixed the ex-depot price of PMS at N138.62 per litre.
The PPMC Manager of Sales, Mohammed Bello, said in Abuja that the new price becomes effective from August 5, 2020.
However, moments after the announcement, most filling stations adjusted their pumps to reflect the, selling as much as N150/litre, while only a few still maintained the old price of N143 per litre.
The National President of Petroleum Products Retail Outlets owners Association of Nigeria (PETROAN), Dr Billy Gillis-Harry, faulted the Federal government’s control of fuel prices, saying the policy have a negative impact on the businesses of marketers.
He hinted that the new ex-depot price is an indication that consumers will pay more as other macroeconomic variables would be impacted.
“We woke up yesterday (Tuesday) to have the PPMC announce N138.62 per litre as price from them. Once that happens, obviously the price at which we are going to sell will also be higher and of course, you have the attendant value because the whole microeconomic value will be impacted.
“So we are careful to wait and discuss with the authorities to have a jaw on the matter so that we do not just come out with a pump price because as it is now, if retailers fix prices at N149 or N150, they might be running afoul of the PPPRA projection and we are careful not to do that,” Gillis-Harry said.
He said that marketers are currently at a fix rehgarding the new pump price, adding that there are plans for stakeholders meeting with the government, after which he said they would announce the new price.
“Right now, it has thrown the over 300,000 marketers into confusion but the only way we can do this successfully is when we are able to sit on a round table to discuss and agree on what is commensurate because there are a lot of cost implications in running retail outlets.
“What I can say right now is that we are not in the situation where we can say that we are going to fix our retail price, right now, all our members are sitting in limbo but we are waiting and hoping that after this consultation, we should be able to get a price.
“I have read in the papers where N150 per litre was speculated but this might not be the case. It may be more, or less, but we need to be able to sit down and look at the realities of what is involved and also the pockets of Nigerians because it will affect so many things,” he stated.
Also, the National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Chinedu Okoronkwo, said the system of market dynamics would have to play out in pricing.
According to him, there would no longer be price uniformity, adding that the development further shows that the market has been deregulated.
He said: “The market is dynamic. You sell as you buy. You were buying at N133 and now buying at N138; the same price will not suffice. Definitely, this is showing that the market is being totally deregulated.
You don’t expect uniform prices any longer. “Some can make N1 their profit while some will look at N5. If you put N150 and another person is putting N148, people will start going to that place. Like I said, it is market dynamics that will determine the pump price.”
He further stressed the need for petroleum products to be produced locally, saying only with this would the pricing issues be resolved. “With this, some of these factors would have been eliminated and it would be cheaper going forward,” Okoronkwo added.
Meanwhile, the Kano chapter of IPMAN has directed its members to sell petrol at N150 per litre. The IPMAN chairman, Bashir Dan-Malam, who gave the directive in a statement, said the directive followed the new price modulation announced by the Petroleum Products Marketing Company (PPMC).