More hardship as petrol sells N160 per litre

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Motorists, others at a filling station to buy petrol

Barely 48 hours after power distribution firms increased electricity tariff by over 50 per cent, Nigerians have to brace for hard times as petrol will now sell for N160 per litre.

This follows today’s announcement by the Pipelines and Product Marketing Company (PPMC), increasing ex-depot price of petrol from N138.62 to N151.56 per litre.

The price increase is contained in an internal memo from PPMC’s Ibadan depot marked PPMC/IB/LS/020.

The memo dated September 2, 2020 and signed by D.O Abalaka reads: “Please be informed that a new product price adjustment has been effected on our payment platform.

“To this end, the price of premium motor spirit (PMS) is now one hundred and fifty-one naira, fifty-six kobo (N151.56) per litre.

“This is effective 2nd September 2020.”

The ex-depot price is the price at which the product is sold to marketers at the depots.

With the price increase, depot owners and major marketers that buy directly from PPMC would sell the product for N155.60 to marketers and other filling stations.

A depot manager who spoke on condition of anonymity told NewsGazette that retail outlets will mark up the price to N160 litre of petrol.

It would be recalled that the federal government had in March announced plans to stop the subsidy payment regime as it said the downstream sector of the oil industry will be fully deregulated.

“If you look at the template the Petroleum Product Pricing Regulatory Authority (PPPRA) has been using in setting prices, you will find that if you just apply even the official exchange rate and Platts for the month of August, prices at the pump should be significantly higher than where there are today,” the managing director of 11Plc (formerly Mobil Oil Nigeria), Mr. Adetunji Oyebanji, told CNBC Africa on Tuesday.

The government said the prices of all petroleum products, which include petrol, would be fully determined by market forces most especially the international prices of crude oil.

The new increase in petrol comes after Brent futures stood at $45 a barrel in London on Wednesday, having more than doubled since late April as a result of Organisation of Petroleum Exporting Countries’ intervention and a revival in demand.

“We believe that when subsidies are removed, and you allow for price liberalisation, which means that the market will fix prices at the pump, then that will allow full cost recovery by all the operators, and with that, it means that more investments will be attracted to the industry at all levels of the value chain,” Oyebanji said.

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