Motor spirit price may fall blow N87 per litre prior to the end of
the first quarter of 2016, latest findings from the Nigerian National
Petroleum Corporation have revealed.
This is
comes to the light when corporation announced that the Kaduna Refining and
Petrochemical Company would start producing petroleum products beginning
from today (Saturday).
According
to the NNPC, the current pricing template for petrol, which was prepared
by the Petroleum Products Pricing Regulatory Agency, contains
significant inefficiencies that should be reviewed.
The
corporation’s Group General Manager, Corporate Planning and Strategy,
Mr. Bello Rabiu, told journalists in Abuja on Friday that going by the
fall in the price of crude oil, it was important to consult relevant
stakeholders in order to produce an adjusted template.
Rabiu said
consultation with stakeholders was to negotiate and reduce some of the
costs associated with the importation of petrol, adding that the
government had the target of reducing the amount charged for logistics
and distribution margin on every litre of premium motor spirit consumed
in Nigeria.
The GGM
was affirmative that the adjusted template would surely have a
considerable reduction in the pump price of petrol when it is completed
before the end of the first quarter of next year, stressing that when
this is achieved, there would be no need for subsidy as the import price
of PMS would have reduced considerably.
Rabiu
said, “We are engaging industry stakeholders to review the PPPRA
template that actually drives the cost of importation. This is because
the actual cost of PMS minus the retail price of the product is subsidy.
So if the cost falls to N80 per litre today, then where will the need
be for subsidy? If the cost is less than the current retail price of N87
then it means there is no subsidy.
“So we are
looking at the template to have it reviewed considering the realities
on the ground now in the sector. What if after the review we are able to
take away about N10 from this current template, which today puts the
cost of petrol at N91.52 litre, then it means the cost may come down to
around N82 per litre.
“That is
why we said there is no need for subsidy in the 2016 budget. We say this
because we know that the price of crude oil will not go so high in the
next 12 months because of the high level of saturation in the market. So
as soon as it is appropriate, we will announce a new price for PMS.”
Bello
stated that the adjusted template would be used subsequently to modulate
prices down or up on a periodic basis if required, adding that if oil
prices continue to fall and inefficiencies are eliminated within the
template, there will surely be negative subsidy.
The negative subsidy, he said, shall be remitted to the Petroleum Support Fund in line with the current PPPRA guidelines.
He said,
“The savings under such a regime could be domiciled in the PSF as a
buffer for future subsidy (if any) that may arise during high oil price
regime or invested by the industry in supply and distribution efficiency
improvement projects such as decongestion of Apapa area, Single Point
Monitoring in Port Harcourt and Warri, complimentary rail services,
inland waterways, etc.”
On the
commencement of production at the Kaduna refinery, the Managing
Director, Pipelines Product Marketing Company, Mrs. Esther Nnamdi-Ogbue,
said crude oil had been pumped to the facility from Warri.
She stated
that some pipelines had started pumping crude oil and refined products,
adding that petrol had been pumped from Atlas Cove to Mosimi depot
using the pipelines connecting both facilities pipelines.
Nnamdi-Ogbue
also assured Nigerians that the NNPC had enough petrol to keep the
country wet for at least 12 days, and urged motorists and petrol seekers
to avoid panic buying.
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