Petrol to sell for N130 per litre

The Federal Government is set to commence partial deregulation of the downstream petroleum sector, allowing major and independent marketers to sell Premium Motor Spirit, PMS, also known as petrol, at prices convenient for them.
This came as Minister of State for Petroleum Resources, Dr Ibe Kachikwu, said the Federal Government was looking at privatising the nation’s refineries within the next 12 months. The Federal Government, sources said, will, however, continue to regulate the price at which the product is sold at the Nigerian National Petroleum Corporation’s, NNPC, retail outlets due to the ease of accessing foreign exchange by the NNPC. Signs that the Federal Government had opted for partial deregulation of the sector was evident in the last couple of days, as the Petroleum Products Pricing Regulatory Agency, PPPRA, had refused to update its Products Pricing Template for May 2016. The PPPRA template was last updated April 28 and released April 29, 2016. In the template, the Expected Open Market Price for PMS was N98.62 per litre for NNPC retail outlets and N99.38 per litre for independent and major oil marketers. Subsidy According to the template, at N98.62 and N99.38 per litre, the Federal Government is paying subsidy of N12.62 and N12.88 per litre, respectively. Sources in the PPPRA and office of the Minister of State for Petroleum Resources, who preferred not to be named, denied knowledge of any plan to allow marketers determine the price at which they chose to sell, saying it is only the Presidency that would make such decision. The sources confirmed that there had been series of meetings between Kachikwu and some oil marketers on ways to end the fuel crisis, stating that they were yet to arrive at a decision. However, there are reports that the Federal Government had secretly given the independent and major oil marketers the go-ahead to source dollars outside the Central Bank of Nigeria, CBN, import PMS and sell at whatever price is convenient for them. It is projected that at the current exchange rate and current price of crude oil, the marketers could sell as high as between N120 and N130 per litre. Contacted, an executives of one of the oil marketers’ association, who chose not to be named, told Vanguard that he was not aware of such decision, stating, however, that the Federal Government had the right to make whatever decision it deemed fit. Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, had last month during a visit to the Petroleum Products Pricing Regulatory Agency, disclosed that from May 2016, the price of Premium Motor Spirit would be reviewed to reflect current trends in the global petroleum industry. No agreement with FG on full deregulation – Labour Meanwhile, organised labour, yesterday, dismissed speculations that it had reached agreement with the Federal Government for full deregulation of the downstream oil sector, saying there had never been a meeting on such issue and no such agreement. Both leaders of Nigeria Labour Congress, NLC, and Trade Union Congress of Nigeria, TUC, told Vanguard that government had not invited them or written to them about the intention to deregulate, insisting that there were issues affecting workers and ordinary Nigerians that needed to be addressed before anybody could talk of full deregulation of the downstream sector. According to Mr. Bobboi Kaigama, “there is no such agreement. We have not even met with government on such issue. Look, there are issues affecting workers and ordinary Nigerians on the issue of full deregulation. “There are labour issues to be addressed. If they call us, we will make our demands. But I can bet you that we will not accept a situation where you go into full deregulation without addressing the concerns of workers and other common Nigerians.” Corroborating, TUC’s position, Mr. Benson Opia, NLC Head of Information, said there was no agreement with government and that NLC had not met with government, saying: “We have our organs. When government presents its proposal, our organs will meet and give appropriate response and demands.” We’ll privatise refineries in 12 months – Kachikwu Meanwhile, Dr Kachikwu has said Nigeria was looking at privatising its refineries within 12 months. The minister, who doubles as the Group Managing Director of the NNPC, said his team was working with oil majors on improving the state-run refineries in Nigeria. Kachikwu was quoted in the April bulletin of the Organisation of Petroleum Exporting Countries, OPEC, report to have said discussions were ongoing on how to partner Chevron, Total and ENI. According to the report, Nigeria has “seen a growing dependency on fuel imports as a result of the under-performance of its refining plants in Port Harcourt, Warri and Kaduna.” Kachikwu was quoted by Reuters as saying that Nigeria wanted to privatise the refineries within 12 months, following the much-need maintenance work. “We have got commitments from some of the majors. Agip has indicated interest to work with us on Port Harcourt, Chevron on Warri. We are talking to Total on Kaduna,” Kachikwu was quoted to have said. Kachikwu added that even if the refineries in question performed to their optimum capacity, their production would still not meet local demand for petrol.