Subsidy on petrol increases to N9.09/litre


    fuel2The amount the Federal Government is subsidizing Premium Motor Spirit (PMS), also known as petrol, rose, yesterday, to N9.09 per litre, according to the latest pricing template released by the Petroleum Products Pricing Regulatory Agency, PPPRA.

    Specifically, this means that if the Federal Government was to hands-off subsidizing the product and allow market forces determine the price, Nigerians would be made to pay a minimum of N95.09 to purchase a litre of the petrol from Nigerian National Petroleum Corporation’s (NNPC) retail stations, and N95.74 per litre from other oil marketers.

    This was even as the unending fuel crisis witnessed across the country continued, showing no sign of abating, with some oil marketers blaming the NNPC’s suspension of product allocation to some of them for worsening the crisis. The PPPRA in its template, released Tuesday, put the Cost plus Freight of imported petrol at N74.83 per litres, with other cost elements hiking the landing cost of the product for marketers to N81.44 per litre.

    With a distribution margins put at N14.30 per litre, the Expected Open Market price of the product rose to N95.74 per litre.

    However, the Federal Government fixed the Ex-depot price, which is the price at which marketers purchase the products from depots, at N76.50 per litre, while the retail price was fixed at N86.50 per litre. In spite of the looming increase in fuel price from May, a petrol station owner in Abuja, who is member of the Association of Credit Marketers of Petroleum Products in Nigeria (ACMPPN) lamented that members of the association have not been allocated products since March.

    The marketer called on the NNPC and its subsidiary, the restructured Pipeline Products Marketing Company, PPMC, to urgently lift the suspension it placed on product allocation to credit marketers if it is serious about ending the fuel crisis. However, National President of the Association of Credit Marketers of Petroleum Products in Nigeria (ACMPPN), Samuel Nwoga, insisted that its members were not indebted to the NNPC, while he said the group was already in talks with the NNPC with a view of resolving the areas of differences in the best interest of the country.

    Also, NNPC’s Chief Operating Officer, Downstream, Henry Ikem-Obih said the NNPC has received a letter from the group and a meeting was being scheduled. The marketer, who chose not be named, said the ban on petrol allocation to credit marketers in March coincided with aggravation of the now three-month acute shortage of petrol that has defiled all solutions, as it led to the shutdown of thousands of filling stations across the country.

    According to him, the argument that credit marketers were hugely indebted to PPMC was not true and the marketers have bank guarantees to back their business. He said, “Each credit marketer has a bank guarantee and that means the credit is secured. So why is NNPC asking the major marketers to go back to business and we that have bank guarantees you are shutting us out. “What is happening is nothing short of sabotage because the credit marketers have the best distribution business not only in the big cities like Abuja and Lagos but across the country. “We have the most stations in this country with over 1,000 station petrol stations.

    The previous governments, when there is scarcity like this they will order the depots where we are loading to load us to supply to Nigerians. “And if they load us, within two days the whole scarcity ends but as it is right now despite the acute scarcity NNPC has failed to reverse their decision and lift the suspension.” He maintained that without the participation of its members it would be impossible to end the fuel crisis, especially as none of its members is currently loading from depots across the country. He said, “Under Obasanjo regime, the system of credit marketers worked perfectly and when Jonathan came, he also adopted the system and you will have noticed that under Jonathan even when you had few cases of scarcity it did last as long as we are having it now.”

    He, therefore, urged the Minister of State Petroleum Resources, Dr. Ibe Kachikwu to urgently direct the PPMC to lift the suspension of products allocation to credit marketers and order depots across the country to load their trucks. -Nigerianeye