It has been revealed that the Nigerian National Petroleum Commission is considering reducing the pump price of fuel.
*Photo used for illustrative purpose*
There are indications that the the Nigerian National Petroleum Corporation (NNPC) may undertake a downward review of the pump price of petrol in its retail outlets across the country.
According to reports, this could be possible because of a consistent drop in the historical price of petroleum cargoes from about $600 per metric tonne to an average of $440 per metric tonne.
A source told The Nation that since the cargo price is one of the key elements often considered by the Petroleum Products Pricing and Regulatory Agency (PPPRA) in its calculation of the template for petrol pump price, the downward trend could necessitate the corporation reviewing its pump price to reflect the market realities. The other key element being the foreign exchange has been left floating by the Central Bank of Nigeria (CBN).
He also explained that the corporation has spent a lot of energies securing its petrol supplies and distribution networks to keep the country from what he described as system sabotage during the yuletide season by some marketers.
“One of the things we wanted to achieve is to ensure that we do not have queues in this time of the year and a lot of the energies have been spent on securing that. If you look at the market trend at the moment, we have been fortunate. Historically, it is this time of the year that cargo prices are about $500 to $600 per metric tonne, and this is one of the two key elements on the PPPRA templates that nobody controls – it is down to market forces,” he said.
According to him, “The cargo price is usually between $500 and $600 per metric tonne, but this year, we have even had cargoes for $440. The pricing has been good. Our network is a mix of the NNPC and others, because of the open market forex policy, the cost of doing business for others is higher. What NNPC retail has done is to adjust the price to accommodate the additional expense of doing business around this time of the year.
“The N145 per litre is not just the margin but includes freights and all sorts of other expenses; we did that to accommodate the expenses and as we get cheaper and cheaper cargoes, we will adjust our prices in accordance.”