Another hike in the price of Premium Motor Spirit (PMS) may be imminent, as petroleum marketers have proposed a new pump price of N165 per litre for the product, saying that the subsisting price of N145 per litre is no longer sustainable due to the scarcity of foreign exchange to finance fuel importation.
They lamented that the current price is driving them out of business. In a letter submitted by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) to the chairman, House of Representatives ad-hoc committee on review of pump price of premium motor spirit, the marketers argued that in May 2016 when the price of petrol was reviewed from N97 to N145 per litre, the exchange rate was based on N285 to a dollar.
They noted that from June 2016 till date, the exchange rate had been fluctuating between N305 and N490 to a dollar, and argued that the cost of product with freight charges and other cost elements in the Petroleum Products Pricing and Regulatory Agency (PPPRA) template will bring the landing cost to N145.09 per litre at the official rate of N305 per dollar, or N222.23 per litre using the parallel market rate of N490 to a dollar.
The marketers therefore proposed N165 per litre to cover the cost of forex required for products importation, as the free fall of the naira against the dollar is seriously impacting on the pump price.
They said: “The recent appreciation in the prices of crude oil at the global oil market is another argument favouring the upward review of PMS in Nigeria. The gradual increase in the global oil price impacts the pump price since most of the local consumption is imported. Crude oil is refined and imported to Nigeria from other countries, which made the business to be dollarised.
“However, the PPPRA keeps assuring the public that the existing price band of N135-N145 per litre was still okay and, therefore, no basis for increase in the pump price of PMS. The NNPC equally assured there is no immediate plan to increase the pump of price of petrol.
“As much as we are stared in the face with the above facts, we believe that this is not the right time to review the pricing template of PMS due to the following reason: the country is currently consuming about 40.32 million litres of petrol on a daily basis. Prior to now, marketers used to import 70 per cent of petrol while NNPC imported 30 per cent of the local needs. The major challenge now is that NNPC is the sole importer of petroleum products .”
The marketers however acknowledged that the economy was biting hard on all Nigerians and that any attempt to further review the template will aggravate the suffering of ordinary Nigerians as the additional price will be transferred to the end users of the product and negate government’s effort to revert the present recession.
The marketers, however, stressed the need for all an all-embracing stakeholders’ forum to holistically look into the issues raised by all parties in order to find a solution to the challenges without hurting the masses.
Source: Leadership Newspaper
