Though attempts have been made to assure Nigerians that there are no plans to increase pump price of Premium Motor Spirit, popularly referred to as petrol, Punch has gathered that the actual price at which the product should sell at filling stations is N151.87 per litre.
This “realistic” price is more than the maximum N145 per litre fixed by the Federal Government on May 11, 2016 when it liberalised the downstream oil sector, marketers with knowledge of the market and the pricing mechanism have said.
This, they said, was basically due to the continued scarcity of the United States dollar, adding that the true price of petrol was N151.87 litre, judging by the current ex-depot price of the commodity.
In a move to avert a price increase, it was learnt that government conveyed a meeting of stakeholders in the downstream oil sector on Tuesday, which was held at the headquarters of the Petroleum Products Pricing Regulatory Agency, PPPRA, in Abuja.
According to Punch, participants at the meeting included officials of the Nigerian National Petroleum Corporation (NNPC), Ministry of Petroleum Resources, PPPRA, both Oil Marketers associations, Depot and Petroleum Products Marketers Association, Nigeria Association of Road Transport Owners, as well as other concerned persons.
Explaining that the actual cost of the PMS had increased beyond the N145 per litre fixed rate, an oil dealer who attended the meeting stated that when the distribution margin for petrol was added to the ex-depot price, the real cost of the commodity was N151.87 per litre.
The official, who spoke on condition of anonymity due to the sensitive nature of the subject, said, “Since the ex-depot price is around N133.5 per litre and the selling price is N145 litre, when you remove the ex-depot cost from the selling price, you’ll get about N12. Now, from this N12, consider the distribution margin and other costs from the depot; if all these costs are less than N12, then the marketers are making profits and there will be no complaint.
“But if the reverse is the case, then they have a complaint. I want you to find out what is the marketers’ margin, transporters’ margin, bridging fund, Petroleum Equalisation Fund, administrative charges and more. When you add all these together, you will realise that truly, the marketers are doing all they can to hold the pump price at the N145 per litre band.”
Investigations from the PPPRA showed that when the various costs highlighted by the oil dealer were added together, the result was a margin of N18.71. By adding this to the N133.5 ex-depot price, the final figure is N151.87.
For specifics on the distribution margin for every litre of petrol consumed across the country, retailers charge N6; transporters’ allowance is N3.36; bridging fund, N6.2; dealers’ charge, N2.36; marine transport average, N0.15; and admin charge, N0.3; making a total of N18.71.
When asked to state how the marketers had been coping and who is paying the extra considering the fact that some stations were even dispensing petrol at rates lower than N145 per litre, another dealer said, “We met with the government and we made it clear to them that the situation is precarious. The competition has made many of us do things that may be considered unusual in some sense, all in a bid to stay afloat.
“But for how long can this be sustained? The competition has made the marketers to come up with ingenious ways to source forex, which is why some stations still sell below the N145 per litre price in order to attract customers and make turnover in bulk. But the truth is that this is unhealthy and cannot be sustained.”