By Emmanuel Adeleke
Oil marketers have projected that the pump price of Premium Motor Spirit (PMS), popularly known as petrol, could rise above N700 per litre in northern Nigeria starting from July.
The National Controller of Operations, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mike Osatuyi, disclosed this on Wednesday.
He said the prices could rise above N700 in the North once independent marketers start importing products from July.
“What I am seeing is around N600 and above, depending on the exchange rate, the current crude price at the international market and the 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.
Osatuyi had earlier described the current price of petrol as a “transitional price,” adding that marketers were expecting a roadmap from the Federal Government following subsidy removal.
“We are expecting the 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(CNG).
“Already, three marketers have been confirmed to start bringing in products starting from July. That’s when we would know the real price of products because it would definitely increase. This current price is just a transitional price,” he said.
The downstream sector is currently awaiting fresh petroleum products as the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) continues to license operators interested in the importation business.
The Executive Secretary of the Depot and Petroleum Products Marketers Association of Nigeria, Olufemi Adewole, said that the NMDPRA is presently licensing additional importers. He emphasised that the prices of products would depend on market fundamentals.
Adewole pointed out that neighboring countries like Ghana, Benin Republic and Cameroon rely on Nigeria for their petroleum products. He raised concerns about smuggling activities from Nigeria to these countries.
“Prices of products will depend on market fundamentals, and as we speak, the Nigeria Customs Service is delaying some AGO (diesel) vessels because of the 7.5 per cent VAT. And don’t forget, any cost incurred by marketers would be added to landing cost and then to the pump price. The marketer would also have to add profit because they must make profit,” he said.
Also, a former chairman of the Major Oil Marketers Association of Nigeria, Tunji Oyebanji, explained that consumers should expect new pump prices similar to diesel prices and those of neighbouring African countries that import petrol.
“The truth now is that if you look at the prices of other West African countries that also import petrol, then you will have an idea of what the price will likely be once companies start importing. So, if the price we have now is not anywhere close to theirs, then we are not yet there. Another indicator should be the current price of diesel,” he said.
However, Oyebanji mentioned that the price could also be reduced depending on the exchange rate.
He noted the availability of products everywhere and the potential for healthy competition among marketers.
“If prices are higher than those of nearby filling stations, marketers would be compelled to lower their prices to attract customers,” he added.
It was gathered that as of June 19, the price of one litre of petrol in Ghana, Cameroon and Benin Republic was already above N800.
Currently, petrol sells for around N495 and above in Nigeria, with diesel prices approaching N800 per litre.
Source: The PUNCH