Nigerians should brace for new petrol prices, with the Federal Government deregulating the downstream sector of the oil industry.
There is likely to be a minimum of 27.17 per cent hike in fuel price nationwide, officials revealed yesterday.
This came as Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said the Federal Government was looking at privatizing the nation’s refineries within the next 12 months.
The Federal Government, sources said, will, however, continue to regulate the price at which the product is sold at the Nigerian National Petroleum Corporation’s, NNPC, retail outlets due to the ease of accessing foreign exchange by the NNPC.
Signs that the Federal Government had opted for partial deregulation of the sector was evident in the last couple of days, as the Petroleum Products Pricing Regulatory Agency, PPPRA, had refused to update its Products Pricing Template for May 2016.
The PPPRA template was last updated April 28 and released April 29, 2016. In the template, the Expected Open Market Price for PMS was N98.62 per litre for NNPC retail outlets and N99.38 per litre for independent and major oil marketers.
Subsidy According to the template, at N98.62 and N99.38 per litre, the Federal Government is paying subsidy of N12.62 and N12.88 per litre, respectively.
Sources in the PPPRA and office of the Minister of State for Petroleum Resources, who preferred not to be named, denied knowledge of any plan to allow marketers determine the price at which they chose to sell, saying it is only the Presidency that would make such decision.
The sources confirmed that there had been series of meetings between Kachikwu and some oil marketers on ways to end the fuel crisis, stating that they were yet to arrive at a decision. However, there are reports that the Federal Government had secretly given the independent and major oil marketers the go-ahead to source dollars outside the Central Bank of Nigeria, CBN, import PMS and sell at whatever price is convenient for them.
It is projected that at the current exchange rate and current price of crude oil, the marketers could sell as high as between N120 and N130 per litre.
Contacted, an executives of one of the oil marketers’ association, who chose not to be named, told newsmen that he was not aware of such decision, stating, however, that the Federal Government had the right to make whatever decision it deemed fit.
Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, had last month during a visit to the Petroleum Products Pricing Regulatory Agency, disclosed that from May 2016, the price of Premium Motor Spirit would be reviewed to reflect current trends in the global petroleum industry.
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