The Federal Government said as from January 1, 2016, all retail stations of the Nigerian National Petroleum Corporation would start selling petrol at N86 per litre.
Farouk Ahmed, the Executive Secretary, Petroleum Product Pricing Regulatory Agency (PPPRA), announced this at a news conference on Tuesday in Abuja.
He also said other oil marketers would sell at N86.50k per litre.
Mr. Ahmed stated that the reduction in the price of the commodity was
due to implementation of the revised components of the Petroleum Products Pricing Template for PMS and Household Kerosene.
According him, the revised template, which will be reviewed on quarterly basis, is geared towards ensuring an efficient and market-driven price that will reflect current realities.
He said, “Since 2007, while crude oil price had been moving up and down, the template remains the same.
“This made it necessary for us to introduce a mechanism whereby the template would be sensitive to the price of crude oil.
“However, the template is not static, as there would be a quarterly review and if there is any major shift, the Minister of State for Petroleum Resources would be expected to call for a review, either upward or downward.
“If there is no major shift, the price would continue from January to March 2016.
”In addition, there would be a Product Pricing Advisory Committee that would be set up to advise the PPPRA concerning movements in the price of crude oil.”
The executive secretary further stated that the NNPC would sell lower than other oil marketers, due to the fact that it was cheaper for it to import, compared to both the independent and major oil marketers.
He listed the major components affected by the review in the pricing template to include Traders Margin, Lightering Expenses, Nigerian Port Authority (NPA) Charges and Jetty Throughput and Storage Charges, as well as Bridging Fund.
Other components, he said, included Retailers, Transports and Dealer margins.
Giving a breakdown of the revised template, Mr. Ahmed disclosed that Trader’s margin, which was the amount paid to traders for bringing the commodity into Nigeria, has been eliminated, from N1.47 per litre previously.
He said that ‘Lightering’ expenses reduced from N4.07 per litre to N2 per litre; NPA reduced from N0.77 to N0.36 per litre; while Jetty Through and Storage charges were reduced.
Mr. Ahmed said the Ex-depot price of PMS stood at N77 per litre, compared to N77.66 per litre, while the pump price for oil marketers would be N86.50 per litre.
He said the agency reviewed PMS import allocation to the NNPC and other marketers.
Mr. Ahmed stated that the PPPRA, in a bid to guarantee uninterrupted fuel supply nationwide, considered the retail outlets ownership, marketers’ performance of previous quarterly allocation and the challenges in sourcing foreign exchange.
“Consequently, the NNPC was granted 78 per cent of the total allocated volume for the first quarter, while the balance is to be supplied by other oil marketing companies.
“Marketers are required to note that there shall be a mid-quarter review of performance where volumes of non-performing marketers shall be withdrawn and reallocated to performing marketers.
“Furthermore, the PPPRA wished to reiterate that consideration for participation in future allocations shall be on the basis of attainment of 100 per cent performance in first quarter 2016,” he said.
Mr. Ahmed, however, said that any marketer found selling above the PPPRA approved price shall be appropriately sanctioned by the agency.