MAJOR oil marketers nationwide officially met in Abuja on Wednesday, September 3, with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) over premium motor spirit (PMS) price increment.
The ICIR findings have confirmed price increments of 38.6 per cent from N617 per litre to N855 benchmark by the Nigerian National Petroleum Company Limited (NNPCL) across different parts of the country.
In Abuja and Lagos, most NNPCL filling stations sell N855 per litre.
The ICIR reports that some major filling station outlets have started adjusting their pricing with the latest price movement by the national oil company.
Findings from our correspondent showed that the Eterna filling Station in Kubwa (A satellite town in the Federal Capital Territory-FCT) is currently selling at N940 per litre while the Ammasco filling Station in the same Kubwa sells at N945.
The price increment possibly followed the official market entrance by the the chief executive officer of Dangote Refinery Group, Aliko Dangote who had signalled that his petroleum product is expected to hit the market in the next 48 hours.
Energy analysts argued that the national oil company’s inability to sustain below market-reflective price for Nigerians could be a major reason for the price hike as it currently suffers financial distress.
“Dangote may have had an understanding with the NNPCL on possible price adjustment since he’s hitting the market in 48 hours. This is fundamental economics of the law of demand and supply. The government has already promised to sell crude to him in Naira and now he’s in the market, the government has to enforce the right pricing “said the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, told The ICIR.
Speaking exclusively to The ICIR, the chairman of Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, said, “Yes, we are meeting with the oil regulators and getting some price movement signals but it’s not official yet.”
Confirming the development further, the former Chairman of the Major Oil Marketers Association of Nigeria, Adetunji Oyebanji said, “We are currently meeting with the Nigerian Midstream Downstream Regulatory Authority, NMDRA.
“The government sells to us now at N765. If you add transportation and other logistics, you can see that the price is higher than what it used to be. We’ll be approaching Dangote and the NNPCL now since they are the major suppliers currently.
“Adetunji said the development would see marketers adjust prices to enable them to be in business,” he added.
Energy analysts believe Dangote would sell PMS at the official market price development which could see the price rise above what the national oil company– NNPCL currently sells.
“Dangote is not Father Christmas He’s a businessman and is going to sell at the official market price,” an energy analyst, Henry Ademola Adigun told The ICIR.
The ICIR has earlier reported that N1,000 per litre of PMS is imminent as the NNPCL had issued a notice of financial distress, citing concerns about unsustainable subsidy payments.
The landing cost, according to industry sources is N1,100 which shows that the government is still minimally intervening in the pricing, having pegged the price at a benchmark of N855 per litre.
“We still have a minimal percentage of pricing intervention by the government. The element of subsidy has been reviewed downward to a large extent. The oil sector is gradually being fully deregulated,” Adetunji added.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.