Major oil marketers across the country have revealed that there’s going to be a possible increment in the price of the Premium Motor Spirit once the ex-dept price fixed by the Petroleum Product Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Company (NNPC) changes on the back of rising global crude price.
Currently, the landing cost is N180, which according to analysts could put pressure on the PPMC to review it’s current ex-depot price because there’s no provision of subsidy in the national budget as repeatedly stated by the Group Managing Director of NNPC, Mele Kyari.
The ex-depot price is the price at which the depot owners sell the commodity to retail outlets across the country.
“The bottom line is that since we’re not importing, we’re buying from NNPC because of FX concerns. If they don’t change their price, there’s no immediate likelihood of us doing anything about our price,” Adetunji Oyebanji, President of Major Oil Marketers Association of Nigeria, MOMAN told Business day late Tuesday.
According to Adetunji: ”The lead question is, how can the PPMC be sustaining this development when landing cost of PMS is N180 whereas they’re selling to us slightly above N130. When you do the maths of N180-N130, and multiply that by almost 50 million daily consumption. That tells you how much NNPC is bleeding.”
He added that the marketers are calling for a national dialogue on the issue as it is not sustainable. ”That’s why they’re discussing with labour on this and I don’t know what solution labour is offering in this global economic problem.”
According to him, ”this is an economic problem, ” we cannot operate a different market from the global market. you know, the neighbouring African countries’ price is free, and they would have adjusted price.” Once the price is widened, Adetunji said the ”products we’re indirectly subsidising could find its way to cross the border. We can’t be going back and forth on this forever.”
While affirming that there is no petrol subsidy, the Group Managing Director of NNPC, Mele Kyari said there’s no provision for subsidy in the national budget.
”There’s a global energy transition. The less cost-efficient company cannot survive today. $50/barrel production cost cannot survive. There are issues around synergy that we’ve not achieved. There are issues of security. Many companies are hiring their armies and we can’t continue like that, ” Kyari said.
He explained further that: ”It’s not CSR but pure business. We must have the best of fiscal environment and policies so that cost of operation can come down and our target is at least $10/barrel.”
If the aforementioned is done, Kari said tax benefits will increase and profit margin will increase. According to him, it is a task that must be done because the partnership will help the country.
”Crude has hit $60 and it comes with the products price increase. We are trying to keep the country wet. We are engaged in labour. No provision for subsidy in the budget”, the NNPC boss explained.
Nigeria presently sells petrol at N160- N165 – the same price it sold when crude traded for about $43 per barrel, which analyst say is no longer sustainable.
