Fuel marketers in the country have called for the removal of the cap on the pump price of fuel.
They said that the N145 per litre ceiling was unsustainable in view of the falling value of the naira against the U.S dollar.
The marketers expressed support over the decision reached at a gathering of former Group Managing Directors of the Nigerian National Petroleum Corporation (NNPC) on the removal of the price cap on petrol in the country in Abuja
NNPC’s present and past GMDs, as well as the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, at the end of their one-day meeting noted that the N145 per litre fuel price did not reflect the price-determining components of the commodity and the fluctuations of the foreign exchange rate.
Sources close to the major oil marketers association told our correspondents yesterday that they were yet to start importing fuel since the fuel price had been pegged at N145/litre.
They said current exchange rate of the naira to the dollar made it difficult for importers to import fuel and sell at N145 per litre.
The sources added that the marketers were, however, not suggesting that the pump price should go up.
According to a source, “The skyrocketing exchange rate in the country makes it impossible for marketers to import and sell fuel at the price cap of N145 per litre.”
Executive Secretary of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMA), Mr.Femi Adewole, told our correspondent that his members had to source the product from the NNPC because they could not access forex to import it.
He wondered why the price of fuel in the country had not been re-modulated since last May when it was fixed for N145 per litre against the N280 exchange rate to a dollar then.
A member of the Independent Petroleum Marketers Association of Nigeria (IPMAN) Press Committee, Barrister Dibu Aderibigbe, said marketers had warned at the inception that fixing a cap price for PMS would not solve the problem.
“And now what we have said is coming to reality,” Aderigbigbe said.
“The official rate today is about N315 or so. So, from N200 to N315/dollar and if we have to recover cost, can we still continue to sell at N145? I think it is simple based on the forex crisis unless there is a magic maybe they want to start giving importers special rate at N200/dollar and you don’t run economy that way,” he added.
The meeting of the forum on Saturday expressed reservations about the ceiling placed on the price at which the Pipelines and Products Marketing Company, an NNPC subsidiary, sells premium motor spirit to marketers.
The meeting which reviewed the status of the corporation and the nation’s oil & gas Industry, observed that the current ceiling on price of PMS was not in conformity with the liberalisation policy of the government and current realities in the foreign exchange market.
The forum however noted, “That the PMS price cap of N145/litre is not congruent with the liberalization policy especially with the foreign exchange rate and other price determining components such as crude cost, Nigerian Ports Authority (NPA) charges etc remaining uncapped.”
The forum advised that the existing refineries be rejuvenated using the Original Equipment Manufacturers (OEMs). It also said that the refineries must be restructured to operate as an incorporated joint ventures (IJV) similar to the Nigerian Liquefied Natural Gas (NLNG) model with the participation of credible partners with requisite technical and financial capabilities.
The meeting commended “NNPC for resolving the fuel supply crisis but urged the corporation to ensure sustenance of seamless supply of petroleum products nationwide.”
It advised that funding of JV Operations should be the first line charge to oil revenue to ensure sustainable production and reserve growth.
Earlier at the meeting, the GMD, Dr. Maikanti Kacalla Baru, had presented his 12 Business Focus Areas towards putting the corporation on the path of growth and profitability before the forum went into the brainstorming session on the declining production level and its attendant consequences on the environment and the nation’s revenue.
The forum reviewed the security challenges threatening Oil & Gas production and damaging the Niger Delta environment and urged the government to engage the various host communities as well as established social and traditional structures to develop an actionable partnership framework toward finding a lasting solution to the present unrest.
