Oil marketers are clamouring that market indicators should determine the price movement of Premium Motor Spirit, commonly known as petrol, even if it means the price could potentially reach N700. This comes after a 165 per cent increase in petrol prices to N500 following President Bola Tinubu’s announcement regarding the removal of subsidy for the product.
Oil marketers have insisted that the current prices of petrol in the country were not a true reflection of the market. They were projecting a further price review this month, less than two months after the price of petrol was hiked from N189 per litre to N500.
Their demand was granted when some filling stations operated by the Nigerian National Petroleum Company Limited reviewed their pump price of petrol from N537/litre to N617/litre across the country on Tuesday.
A former Chairman of the Major Oil Marketers Association of Nigeria and Chief Executive Officer, 11 Plc, Tunji Oyebanji, said in a chat that oil prices would reflect current market realities.
According to him, this is what is obtainable in other neighbouring African countries that import petrol.
“If the prices in neighbouring countries reflect true market prices and our own do not, there is still a danger. Until we all import at the new exchange rate and know what the price is and compare it with our neighbours, we won’t know the exact situation. Likely, the differential will not be so much,” Oyebanji claimed.
Checks revealed that while PMS price per litre sells for around N617 in Nigeria, the product goes for around N1,169 in Mali; Ivory Coast: N986; Cameroon: N986; Ghana: N948, Togo: N945, and Benin: N877.
The National Controller of Operations, Mike Osatuyi, recently told our correspondent that the price of petrol could likely increase to N600/N700 and above starting in July.
“What I am seeing is around N600 and above, depending on the exchange rate, the current crude price at the international price, and landing cost. Those in Lagos will pay around N600, those outside Lagos around N600 plus, while those in the north would be paying anything from N700 and above,” he said.
Oyebanji added that competition was healthy for the downstream sector, as it would allow for fair play.
“The bottom line is that there will be an adjustment in price. Yes, it may go up now. It could also drop depending on the exchange rate. But the good thing is that products would be everywhere, and if you see that yours is more expensive than those of the filling stations around you, you will be forced to bring down prices so that customers can come and buy. There would be healthy competition, which is good for the market,” he continued.
For Osatuyi, the current price of petrol is a “transitional price”. He hinted that marketers were expecting a roadmap from the Federal Government following subsidy removal.
“We are expecting a roadmap from the Federal Government following the meeting with labour. Labour has said they are giving the government two months to come up with the roadmap. We are also expecting the roadmap on how to deepen the use of Compressed Natural Gas.
“Already, three marketers have been confirmed to start bringing in products starting from July. That is when we would know the real price of products because it would definitely increase. This current price is just a transitional price,” he mentioned.
Oyebanji also warned of the return of smuggling if market forces are not allowed to control the market.
“Would we not see tankers being diverted again to our neighbours? The price differential between us and our neighbours, apart from greed, what else could account for this level of disparity in these June figures?” he wondered.
Oyebanji also declared that depot owners were resorting to both local and foreign loans to finance importation.
“It is not like we are just getting importation licenses. We have been licensed, but we stopped importing because it was no longer profitable. Now, everybody is trying to see what we can do. Some people will raise money and borrow from abroad, while others will borrow from local banks. It is not just three companies that would be importing. Many companies are currently running around to start bringing in products. But we won’t be shouting about it on the pages of newspapers,” he said.
Madukwe B. Nwabuisi is an accomplished journalist renown for his fearless reporting style and extensive expertise in the field. He is an investigative journalist, who has established himself as a kamikaze reporter.
