Petrol to sell for N86/litre from January says fg

Petrol to sell for N86/litre from January, 2016 – FG

*Marketers to sell at N86.50;
*New price regime to last for 3 months
*We’ll resist fuel subsidy removal with all our might — NLC
By Victor Ahiuma-Young & Michael Eboh
ABUJA— The Federal Government, yesterday, stated that effective January 1, 2016, Premium Motor Spirit, otherwise known as petrol, would be sold at N86 per litre by the Nigerian National Petroleum Corporation, NNPC Retail stations, while other oil marketers would sell at N86.50 per litre.
The Nigerian Labour Congress said, however, that it would resist with all its might, any attempt to remove fuel subsidy.
Speaking to newsmen in Abuja, Executive Secretary of the Petroleum Products Pricing Regulatory Agency, PPPRA, Mr. Farouk Ahmed, also announced the first quarter 2016 PMS import allocation of three million metric tonnes to the NNPC and other oil marketers.
On the review of the price of petrol, Ahmed said the reduction in the price of the commodity was due to an implementation of the revised components of the Petroleum Products Pricing Template for PMS and household kerosene.
According him, the revised template, which would be reviewed on quarterly basis and which would soon be presented to oil marketers, is geared towards ensuring an efficient and market-driven price that would reflect current realities.
He said: “Since 2007, while crude oil price had been moving up and down, the template remained the same. This had 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, depending on the market condition.

File: Hawkers of PMS along Kashia road, Kaduna
“If there is no major shift, that is, if there is a marginal change, 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.”
He said the NNPC would sell lower than other oil marketers, due to the fact that it is cheaper for it to import, compared to 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 Ports Authority (NPA) Charges, Jetty Throughput and Storage Charges, as well as Bridging Fund. Other components include: Retailers, Transports and Dealer margins.
Giving a breakdown of the revised template, Ahmed disclosed that Trader’s margin, which is the amount paid to traders for bringing the commodity into Nigeria, has been eliminated, from N1.47 per litre previously; Lightering Expenses reduced from N4.07 per litre to N2 per litre; NPA, reduced from N0.77 to N0.36 per litre; while Jetty Throughput and Storage charges were reduced from N0.80 and N3, to N0.40 and N1.50 per litre respectively.
On the other hand, Retailers margin was increased to N5 per litre from N4.60; Transporters rose to N3.05 from N2.99; dealers margin was reviewed upward to N1.95 from N1.75, while bridging fund dropped to N4 per litre from N5.85.
To this end, Ahmed put the Ex-depot price of PMS at N77 per litre, compared to N77.66 per litre; open market price would be N86.29 for oil marketers and N85.93 per litre for the NNPC, while he stated that pump price for oil marketers would be N86.50 per litre and NNPC, N86 per litre.
On the issue of PMS import allocation to the NNPC and other marketers, Ahmed said that the PPPRA, in a bid to guarantee uninterrupted fuel supply nationwide, took into consideration the issue of retail outlets ownership, marketers’ performance of previous quarterly allocation, as well as the challenges in sourcing foreign exchange.