The scarcity of forex is set to further increase the already high price of fuel as oil marketers propose a price review.
File Photo
Another hike in the price of Premium Motor Spirit (PMS) may be
imminent, as petroleum marketers have proposed a new pump price of N165
per litre for the product, saying that the subsisting price of N145 per
litre is no longer sustainable due to the scarcity of foreign exchange
to finance fuel importation.
They lamented that the current price is driving them out of
business. In a letter submitted by the Petroleum and Natural Gas Senior
Staff Association of Nigeria (PENGASSAN) to the chairman, House of
Representatives ad-hoc committee on review of pump price of premium
motor spirit, the marketers argued that in May 2016 when the price of
petrol was reviewed from N97 to N145 per litre, the exchange rate was
based on N285 to a dollar.
They noted that from June 2016 till date, the exchange rate had
been fluctuating between N305 and N490 to a dollar, and argued that the
cost of product with freight charges and other cost elements in the
Petroleum Products Pricing and Regulatory Agency (PPPRA) template will
bring the landing cost to N145.09 per litre at the official rate of N305
per dollar, or N222.23 per litre using the parallel market rate of N490
to a dollar.
The marketers therefore proposed N165 per litre to cover the cost
of forex required for products importation, as the free fall of the
naira against the dollar is seriously impacting on the pump price.
They said: “The recent appreciation in the prices of crude oil
at the global oil market is another argument favouring the upward review
of PMS in Nigeria. The gradual increase in the global oil price impacts
the pump price since most of the local consumption is imported. Crude
oil is refined and imported to Nigeria from other countries, which made
the business to be dollarised.
“However, the PPPRA keeps assuring the public that the existing
price band of N135-N145 per litre was still okay and, therefore, no
basis for increase in the pump price of PMS. The NNPC equally assured
there is no immediate plan to increase the pump of price of petrol.
“As much as we are stared in the face with the above facts, we
believe that this is not the right time to review the pricing template
of PMS due to the following reason: the country is currently consuming
about 40.32 million litres of petrol on a daily basis. Prior to now,
marketers used to import 70 per cent of petrol while NNPC imported 30
per cent of the local needs. The major challenge now is that NNPC is the
sole importer of petroleum products."
The marketers however acknowledged that the economy was biting hard
on all Nigerians and that any attempt to further review the template
will aggravate the suffering of ordinary Nigerians as the additional
price will be transferred to the end users of the product and negate
government’s effort to revert the present recession.
The marketers, however, stressed the need for all an all-embracing
stakeholders’ forum to holistically look into the issues raised by all
parties in order to find a solution to the challenges without hurting
the masses.
Source: Leadership Newspaper
No comments:
Post a Comment