Uncertainty trails petrol pump price •As commodity sells between N143-N150/litre in filling stations

FOLLOWING an increase in the ex-depot price of Premium Motor Spirit (PMS) also known as petrol, there seems to be uncertainty as to the actual price of the commodity. The Petroleum Products Marketing Company (PPMC), a  downstream subsidiary of the Nigerian National Petroleum Corporation (NNPC) had on Tuesday, fixed the ex-depot price of PMS at N138.62 per litre.

In a memo signed by its Manager, Sales, Mohammed Bello, in Abuja, the PPMC said the new price becomes effective from August 5, 2020. Checks revealed that barely 24 hours after the announcement, some filling stations had increased their pump price to N150/litre, while others still maintained N143.

While reacting to the development, marketers stated that the commodity prices would differ, as marketers had to sell at a price best suitable to them. Speaking to the Nigerian Tribune, the National President, Petroleum Products Retail  Outlets owners Association of Nigeria (PETROAN), Dr Billy Gillis-Harry, lamented the Federal Government’s control of fuel prices, saying this had continued to affect businesses of marketers.

He said with the new ex-depot price, there is an indication that Nigerians will pay more as other macroeconomic variables would be impacted. His words: “We woke up yesterday to have the PPMC announce N138.62 per litre as price from them. Once that happens, obviously, the price at which we are going to sell will also be higher and of course,  you have the attendant value because the whole microeconomic value will be impacted.

“So we are careful to wait and discuss with the authorities to have a jaw on the matter so that we do not just come out with a pump price because as it is now, if retailers fix prices at N149 or N150, they might be running afoul of the PPPRA  projection and we are careful not to do that,” Gillis-Harry said marketers are currently at a fix as to what the new pump price will be, adding that there are plans for stakeholders meeting with the FG, after which he said they would come up with a new price.

“Right now, it has thrown the over 300,000 marketers into confusion but the only way we can do this successfully is when we are able to sit on a round table to discuss and agree on what is commensurate because there are a lot of cost implications in running retail outlets.

“What I can say right now is that we are not in the situation where we can say that we are going to fix our retail price, right now, all our members are sitting in limbo but we are waiting and hoping that after this consultation, we should be able to get a price.

“I have read in the papers where N150 per litre was speculated but this might not be the case. It may be more or less but we need to be able to sit down and look at the realities of what is involved and also the pockets of Nigerians because it will affect so many things,” he stated. Also, the National President,  Independent Petroleum Marketers  Association of Nigeria (IPMAN), Mr. Chinedu Okoronkwo, said the system of market dynamics would have to play out in pricing.

According to him, there would no longer be price uniformity, adding that the development further showed that the market had been deregulated. He said: “The market is dynamic. You sell as you buy. You were buying at N133 and now buying at N138; the same price will not suffice. Definitely, this is showing that the market is being totally deregulated.

You don’t expect uniform prices any longer. “Some can make N1 their profit while some will look at N5. If you put N150 and another person is putting N148, people will start going to that place. Like I said, it is market dynamics that will  determine the pump price.”

He further stressed the need for petroleum products to be produced locally, saying only with this would the pricing issues be resolved. “With this, some of these factors would have been eliminated and it would be cheaper going forward,” Okoronkwo added.

Meanwhile, IPMAN, Kano chapter, has directed its members to sell petrol at N150 per litre.  The IPMAN chairman,  Bashir Dan-Malam, who gave the directive in a statement, said the directive followed the new price modulation announced by the Petroleum Products Marketing Company (PPMC).