FG Under Pressure To Increase Fuel Price To N155/litre
There were indications at the weekend that the federal government is under immense pressure to hike the price of Premium Motor Spirit, PMS, popularly called fuel, from its current pump price of N145 to about N155.
According presidency sources who volunteered information to Nigerian Pilot, the pressure is being mounted by marketers who argue that the naira-dollar exchange rate does not make good business sense for them to continue to dispense the product to the public at N145 per litre.
Following the removal of subsidy on the product by the federal government months ago, the price per litre shot up from N87 to N145.
The calculation was that marketers would be able to sell fuel and still make marginal profit.
However, with the free-flowing status of the naira, there is now increasing belief that whatever profit margin marketers thought they would enjoy from the current pricing regime is being eroded with many including the Nigerian National Petroleum Corporation, NNPC arguing that it no longer make economic sense to continue to sell at that price.
This was said by a top presidency source who works at the Petroleum Products Pricing Regulatory Agency, PPPRA, last night.“Yes, the pressure is coming; but we wish they understand that whatever is happening in the economy right now, is not permanent. With time, very soon, the exchange rate will favour our Naira so much that their marginal profit will over shoot their expectation.”
His colleagues spoken to shared the same view.
They were asked to react to reports of fears being expressed by some former and present Group Managing Directors of NNPC that the current pump price of N145 per litre is no longer feasible.
According to the report, the GMDs who spoke after a one-day meeting with the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, in Abuja, argued that the amount does not correspond with the price-determining components of the commodity and the fluctuations of the foreign exchange rate.
A statement by the NNPC had said among others that, “They (the GMDs) noted that the petrol price of N145/litre is not congruent with the liberalisation policy especially with the foreign exchange rate and other price determining components such as crude cost, Nigerian Ports Authority charges, etc remaining uncapped.”
According to NNPC, the GMDs were concerned about the declining crude oil production level and its consequences on the environment and the nation’s revenue arguing that should the current situation continue, it could lead to the crippling of the corporation and the nation’s oil and gas sector which is the mainstay of the Nigerian economy.At press time, organised labour was reportedly restive, warning that any further increase in the price of fuel would be resisted by all consuming stakeholders in the sector.
