The National Economic Council (NEC) has initiated moves that may possibly lead to another hike in the pump price of Premium Motor Spirit (PMS).
After appraising the current fuel crisis, NEC comprising state governors and top officials of the Federal Government, charged its sub-committee investigating the remittances of revenue generating agencies to interface with the Nigerian National Petroleum Corporation (NNPC) on the appropriate pricing of petrol in the country.
The NEC, at its meeting on Thursday chaired by Vice President Yemi Osinbajo, mandated the committee to consider the price of PMS in neighbouring countries as against Nigeria’s N145 per litre.
But at another forum, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, told journalists in Abuja that having undertaken a “massive” price increase two years ago, the government had no intention of doing that again.
He said that President Muhammadu Buhari “realises and sympathises” with the sufferings of Nigerians and is working to end the crisis.
The Bauchi State Governor, Mohammed Abubakar, who addressed the press on the outcome of the NEC meeting, said members were briefed on the lingering fuel scarcity by the Group Managing Director of the NNPC, Mr. Maikanti Baru.
He said that only the NNPC currently imports petrol for use in Nigeria, adding that the scarcity is caused by “an inter-play of the exchange rate of the Naira to the Dollar and the price of crude oil at the international market which affects the landing cost of refined products”.
Governor Abubakar continued: “And in the process, makes the operation of the current price regime almost impossible without some measure of nil return for whoever (marketer) is in the process.
“The NNPC has been suffering a lot of setbacks; the highest amount of under recovery. By under recovery it means the inter-play between the landing cost of a litre of the PMS in Nigeria and the pump price of that product. If the product lands at N170 for example, and you sell at N145, immediately you know that you have an under recovery of about N25 for each litre of fuel”.
Abubakar said that based on the NNPC GMD’s presentation, the NEC gave extra assignment to its committee that has been interfacing with all revenue generating agencies of the Federal Government. The committee is chaired by the Governor of Gombe State, Alhaji Ibrahim Dankwambo.
“That committee has been charged with the responsibility of interfacing with NNPC with a view to determining the correct price for PMS, considering the price of the product in especially countries that are bordering Nigeria; because that is one of the reasons that encourage smuggling of the products to these areas,” he said.
He insisted however, that the Petroleum Products Pricing Regulatory Agency (PPPRA) remains the appropriate agency to fix the pump price of petrol in the country.
Meanwhile, in Chad a price of petrol per litre goes for $1.07 (about N400), Nigeria is $0.48 (N145), Benin Republic $1.00 per (N365), and Cameroon $1.09 (over N400).
But Kachikwu insisted that despite the disparity between the landing cost of petrol and the regulated pump price of N145 per litre, there will be no increase in the price of the product.
The minister blamed the crisis on policy and logistics issues which were yet to be addressed, noting that there is need to work backwards to see what can be done to keep the price at N145.
He said: “I can tell you behind the scenes, a lot of meetings are taking place because the fuel queue issue is both logistics and policy issues.
“We will need to address fundamental policy issues to enable it go away, especially in the area where the pricing is showing differentials between the landing and sales price.
“The President is obviously very committed to keeping the price of fuel at the price where it is because he realises and sympathises with the sufferings of Nigerians. We did a massive price hike two years ago under me. We don’t intend to do that again,” Kachiku stated.
Ahead of the Nigerian International Petroleum Summit beginning on Monday in Abuja, he directed the NNPC to clear fuel queues in the nation’s capital, adding: “I will not like my colleagues to come and see the fuel queues. So my directive to NNPC would be to get these queues out of Abuja.
“The NNPC is working round the clock on this; if you remember when this first started in December, it was a lot more massive. Lagos is fuel queue-free and a lot of the state capitals are. Abuja is still struggling because of the logistics issues.
“I will be instructing the NNPC to do whatever it takes to ensure there are no queues next week. Quite frankly, they will have to do whatever it takes to get this eliminated in Abuja.
He said the maiden NIPS conference, which would begin on February 18 and end on the February 23, will help Nigeria’s oil and gas industry to build its capacities and competitiveness.
Meanwhile, the National Bureau of Statistics (NBS) in its latest Petrol Price Watch report for January 2018, said consumers paid over 31 per cent more for fuel during the month.
According to NBS, average price for petrol during the month across the 36 states and the FCT was about N190.90 per litre against the retail pump price of N145 per litre approved by the Petroleum Products Pricing Regulatory Agency (PPPRA).
Compared with about N171.8 per litre paid in December, 2017, NBS said the average price of N190.9 per litre is about 11.12 per cent higher. The price is about 28.4 per cent increase from about N148.7 per litre recorded in the corresponding month of January 2017.
The report showed that petrol consumers in Osun state paid the highest price of about N229 per litre in January 2018, followed by Abia with about N227.5 per litre and Benue state (about N223.3 per litre). Kogi state consumers paid the lowest average price of N152.83 per litre, followed by Gombe (about N157.73) and Zamfara N159.
On the other hand, consumers in the South East geopolitical zone paid the highest price of N203.17 per litre for petrol, with South-South paying N197.32 per litre and South West N195.39. People in the North West paid N193.42 per litre, while N172.5 was paid in the North East and N185.83 in the North Central.