Subsidy Removal: Why Petrol Price Can’t Be Less Than N500/Litre – Oil Marketers

Subsidy Removal: Why Petrol Price Can’t Be Less Than N500/Litre – Oil Marketers

Following the adjustment of petrol price at retail outlets by the Nigerian National Petrol Company (NNPC) Limited, the Independent Petroleum Marketers Association of Nigeria (IPMAN) says the new pump price of a litre of Premium Motor Spirit also known as petrol can’t be less than N500.

IPMAN Deputy President, Zarama Mustapha, stated this on Channels Television’s Sunrise Daily programme on Thursday.

He explained that the NNPC being the sole importer of petrol fixes the price for oil marketers across the country.

According to him, oil marketers will now lift petrol at over N460/litre at fuel depots, add transportation cost and profit margin which will make the new pump price go as high as over N500 per litre.

Already, a litre of petrol is being sold at over N500 across the country following NNPC price adjustment and the presidential pronouncement on subsidy removal.

Fuel queues have since surged for the vital commodity, compounding the traffic situation in parts of the country, even as transportation cost skyrocket to more than 100% increment.

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Speaking on Thursday morning, the IPMAN executive said, “NNPC being the sole supplier is the determiner of how much we purchase. The deregulation is just taking effect. May be with time, they will allow other players to also participate in the importation of the product to compete with the NNPC Limited.

“I still believe the NNPC is still the government because it is owned by the government.”

President Bola Tinubu during his inaugural speech on May 29 at the Eagle Square in Abuja announced the removal of subsidy payment on petrol. The President said that the immediate past administration of Muhammadu Buhari did not make provisions for subsidy in the 2023 budget beyond June.

Many Nigerians had expected that the new price regime would come into effect by July 1 but almost immediately after the presidential pronouncement, queues resurfaced at filling stations across the country even as retail outlets hoard the product and increase prices.

On Wednesday, the NNPC officially adjusted pump price of the commodity, stating that the price will continue to fluctuate market realities and dynamics.

Commenting on the price adjustment by the NNPC, the IPMAN Deputy President said oil marketers expected that the new price regime would begin by July and not in May.

Mustapha said, “We were not even expecting that such a thing is going to be implemented before the end of May; we were all surprised seeing a list stating the prices of NNPC retail stations across the nation.

“Each state has its own different price based on the location of the station or the location of the state from the source of the product – that is the depot where most of the products are being lifted and subsequently transported to all nooks of the country.

“As far as independent marketers are concerned, as at now, we have not been officially communicated in terms of the depot price today but there are some papers going round just like the ones we saw yesterday that is stating that a litre is going to be purchased at the private depot at the cost of N460.

“I don’t know the exact price but it won’t be anything less than N460, the new deregulated price that a marketer is supposed to buy. Then you will add up the transportation cost and the marketers’ margin and that will come to whatever price the government has announced yesterday.

“About N51 for transportation from Lagos to Maiduguri. So, if you lift at N460 something, you have to add that N51 and add up your margin for you to at least remain afloat in business.”

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