The pump price of the Premium Motor Spirit, also known as petrol, appears set to hit N160 per litre as the Nigerian National Petroleum Corporation has increased the price at which it sells the product to marketers from N138.62 per litre to N147.67.
The Petroleum Products Marketing Company, a subsidiary of the NNPC, had initially on Wednesday increased the ex-depot price of the PMS to N151.56 per litre, with marketers saying the product would be sold at between N162 and N165 per litre.
The ex-depot price is the price at which the product is sold to marketers at the depots.
The N151.56 ex-depot price was announced in an internal memo to all stakeholders with reference number PPMC/IB/LS/020 dated September 2, 2020 and signed by D.O Abalaka.
The memo, a copy of which was seen by one of our correspondents, said, “Please be informed that a new product price adjustment has been effected on our payment platform.
“To this end, the price of Premium Motor Spirit is now one hundred and fifty-one naira, fifty-six kobo (N151.56k) per litre. This is effective from September 2, 2020.”
But the PPMC, in another internal memo dated September 2, 2020 with reference number PPMC/MOD/Sales/346 and signed by Onya Schola, reduced the ex-depot price to N147.67 per litre.
When the ex-depot price was fixed at N138.62 in August, marketers were selling petrol at between N148 and N150 per litre. With a new ex-depot price of N147.67 per litre, the pump price may be between N157 and N160 per litre.
Amidst the different ex-depot prices, the Managing Director of the PPMC, Musa Lawal, told one of our correspondents that the first ex-depot price was wrong and should be discarded.
He said the company was investigating how the first memo went out, stressing that although it was from the PPMC, the figures were still being computed and had not been concluded.
“That is not authentic. It is wrong and there is a price review which shall be communicated properly, but what came out early today is the wrong one,” Lawal stated.
Asked to provide the correct one, he replied, “The one that I saw today on the website of one of the dailies is the wrong one. As we speak the circumstances under which that happened are being investigated.
“However, I cannot tell you more than this as the PPPRA (Petroleum Products Pricing Regulatory Agency) is the one to fix prices because we sell based on the guiding price from them.”
But the PPPRA on Wednesday decided to stay mute, as it did in August when the ex-depot price for the PMS was released by the PPMC.
Its spokesperson, Kimchi Apollo, did not answer calls nor replied a text on the matter.
The PPPRA’s silence on petrol price is contrary to what it said in March.
The agency had stated that it would be issuing a monthly guiding price for petrol, but in August it did not issue any and had remained mute since then.
Meanwhile, oil marketers told BUSTANEWS that going by the circulating ex-depot prices for petrol, the pump price for the commodity should hit between N160 to N162/litre.
They also stated that loading of products had stopped at some depots, as marketers were confused on which price to either buy or sell the commodity.
Up till 8pm on Wednesday, officials of the Independent Petroleum Marketers Association of Nigeria stated that no authentic communication had been received from either the PPPRA of the PPMC on the pump price or ex-depot price of petrol.
“Loading has stopped in some depots because of this confusion caused by the price modulation of guiding exercise introduced by the PPPRA and up till now we’ve not received any notice on either the ex-depot price or pump price,” the National Public Relations Officer of IPMAN, Ukadike Chinedu, stated.
But the Zonal Chairman, Independent Petroleum Marketers Association of Nigeria, South- West, Mr Dele Tajudeen, told one of our correspondents that the association had decided that the pump price would be N162 per litre when the ex-depot price was increased to N151.56.
Asked what the pump price would be following the reduction of the ex-depot price to N147.67, he said the association would decide on that later on Wednesday if the ex-depot price remained the same.
“We will add whatever the NNPC has added to our buying price to our selling price,” Tajudeen added.
Petrol price was increased by marketers to between N148 and N150/litre in August from a band of N140.80 to N143.80.
Following the announcement of the new depot price, many filling stations in Ogun and Lagos states were shut on Wednesday as marketers awaited further clarifications from the PPMC.
The Federal Government increased the petrol price a day after power distribution companies hiked electricity tariffs across the country.
The petrol price hike generated angry reactions from the Nigeria Labour Congress, Manufacturers Association of Nigeria and other major groups in the country on Wednesday.
The acting Director-General, Manufacturing Association of Nigeria, Mr Ambrose Oruche, in an interview with one of our correspondents, said the poor and small businesses that depended on the PMS to power their generators would be hard hit.
He said it was important for the government to introduce measures to cushion the effect of the deregulation in the sector.
Oruche stated, “To reduce the impact, government should do more in ensuring power generation is big and distribution is efficient, and ensure that people get at least 20 hours of light in a day to reduce dependence on the PMS.
“Government should find a way of compensating the SMEs to stay in business through tax rebates or grants to remain in business and stay competitive.”
But the Nigeria Labour Congress said by increasing the fuel pump price three times within three months, the Federal Government was taking Nigerians for granted.
The NLC President, Ayuba Wabba, said the union could no longer guarantee industrial harmony in view of the development.
He said Nigerians and the NLC were shocked by the price increase, “coming at a time when many Nigerians are passing through very peculiar and precarious times.
“It’s like Nigerians are being taken for a ride; the increase in price of petroleum is like adding salt to injury.
“The increase in price of petroleum has happened now more than three times in three months. Only yesterday (Tuesday), they hiked the tariff of electricity. To compound it, they also reduced the interest rate on savings which affected mostly the poor and the vulnerable.
“While rejecting this in the strongest terms, I think Nigerian government is taking Nigerians for granted.”
The congress noted that the government had betrayed the trust of Nigerians and left them vulnerable to economic ravages.
Former Ekiti State Governor, Mr Ayodele Fayose, tweeted that the increase was ludicrous particularly coming at a time the whole world was busy finding solutions to the COVID-19.
He stated, “Just in case those who led the Save Nigeria protests across Nigeria during Peoples Democratic Party government of Dr Goodluck Jonathan are not aware, I warned.”
On its part, the minority caucus in the House of Representatives condemned the increase in pump price of petrol.
The Minority Leader of the House, Ndidu Elumelu, in a statement on Wednesday and titled, ‘Reps caucus demands halt in N151 fuel price increase,’ described the increment as unacceptable.
He warned that it would result in increase in the already high cost of consumer goods and services and worsen the current economic hardships being suffered by Nigerians.
A former President of the Committee for the Defence of Human Rights, Malachy Ugwumadu, in a chat with one of our correspondents, said the price hike was ill-timed.
He said, “At a time when Nigerians are still reeling under the weight and pains occasioned by COVID-19 pandemic, the time is certainly wrong. Coming on the heels of the hike in electricity tariff renders it both ill-timed and insensitive.”
The Convener of the Concerned Nigeria group, Deji Adeyanju, said the price increase was ill-advised and anti-people.
In an interview with the correspondence, Adeyanju said, “The common man can hardly breathe. Buhari now has his hands tightfisted on Nigerians. He wants to make sure that people can no longer survive.
“How do you explain a situation where the country is sinking and going down? The country practically relies on loans to fund its own budget and service its debt.”
It’s callous – PDP
The Peoples Democratic Party also rejected the increase in the price of petrol as well as the hike in the electricity tariffs . The main opposition party described the increases as callous and unjustifiable.
This was contained in a statement titled ‘PDP rejects N151 fuel price, hike in electricity tariff…Says APC is punishing Nigerians,’ signed by the party’s National Publicity Secretary, Kola Ologbondiyan, in Abuja, on Wednesday.
While demanding an immediate reversal of the prices to avert a national crisis, the party said, “The increase will result in upsurge in costs of goods and services and worsen the biting hardship being faced by Nigerians, who are already impoverished and overburdened by APC-imposed high cost of living in the last five years.”
In its response, the APC, in a statement titled, “APC to PDP: cajole your cronies to return stolen fuel subsidy loot,” signed by its Deputy National Publicity, Yekini Nabena, dismissed the PDP as “shameless.”
It challenged the PDP to come clean of allegations of several years of the pillage of the nation’s resources under the guise of its corruption-tainted fuel subsidy regime.
A foremost economist and Managing Director of Financial Derivatives Company Limited, Mr Bismarck Rewane, in an interview with BUSTANEWS noted that while the rise in global oil prices meant increased revenue from crude oil sales, it would also lead to an increase in the price of petroleum products.
Noting that people’s disposable incomes and productivity had not increased, he said petrol price hike would add more pressure to consumers.
“Until our refineries are fixed or when Dangote refinery comes on stream, the country will continue to have this challenge. Let us manage to minimise the increase in petrol price so that people won’t suffer,” he said.
The Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, had said on Tuesday that the pump price of petrol should be significantly higher than N148 per litre.
Oyebanji, who spoke on CNBC Africa on Tuesday, said, “If you look at the template the PPPRA has been using in setting prices, you will find that if you just apply even the official exchange rate for the month of August, prices at the pump should be significantly higher that where there are today.”