Official: Petrol to sell for N86 per liter from January 1, 2016

After being handed the task to “modulate” (apologies, Dr Ibe Kachikwu) the pump prices of petroleum products by the federal government, the Petroleum Products Pricing Regulatory Agency (PPPRA) has pegged the price of Premium Motor Spirit (otherwise referred to as petrol) at N86 per liter at the pumps.

But the price template is in two ranges. The PPPRA announced that all NNPC outlets will sell at N86 per liter while the private outlets will dispense the product at N86.50k. Petrol presently sells for N87 per liter at official rates.

The new price template will run from January 1 to March 31 and will be further revised as the year progresses.

PPPRA Executive Secretary Farouk Ahmed told journalists in the nation’s capital that the revised template has been approved by the Minister of Petroleum Resources, Ibe Kachikwu.

Ahmed said: “Accordingly, the ex-depot price of PMS shall be N77.00k per litre while the pump price shall be N86.50k per litre – in line with the prevailing market trend.

“The key thing here is that with the revision, the open market price has come down slightly. The new pump price is N86.50k, down from N87 per litre, effective from January 1, 2016.

“However, for NNPC import, because an element of the template which is the financing cost, is not captured in the NNPC template. Therefore, NNPC import is slightly lower. The NNPC price will be N86 per litre, meaning that if you go to NNPC retail stations, you should buy at N86 per litre and then N86.50k in other stations”.

Ahmed added that reviews will be periodic.

“Another important point is that this is not static as there will be a quarterly review of the price template. However, if there is a major shift, the minister may call for a review either upwards or downwards, depending on the market.

“But for now, at least for the first quarter, this price remains for three months, from January to March,” he added.

Ahmed added that there’ll be a pricing advisory committee composed of industry technocrats which would sit down from time to time to advise the PPPRA on price movements.

He noted: “But the PPPRA will still sit down and do its work. The committee will advise it on any drastic movement in price.

“The open market price is N86.29k. If you do the calculation, that means there is an element of over recovery and what we will do now is that we will go back to the marketers and bill them for the recovery.

“With regards to NNPC, their arrival is N85.93k but they are selling at N86, so there will also be element of over recovery. However, we are comfortable with the numbers.”