The Nigerian National Petroleum Corporation (NNPC) has disclosed that it will spend N102.96 billion on petroleum subsidy for the month of March considering the new product pricing. Petroleum Product Pricing Regulatory Agency (PPPRA), had on Thursday hinted a new product pricing that the pump price was expected to hit between N209.61 and N212.61/litre for an upper and lower ex-deport price that triggered an uproar by members of the public about the hike in the price of petroleum in the country.
The PPPRA is the regulatory office of the downstream sector also put the deport price for the month at N206.42/litre while the landing cost was expected to be N189.61/litre. The Agency after receiving public lashing pulled down the new pricing template they earlier published on their website though they claimed was the current realities of the market. The ex-deport price the NNPC earlier approved for March 2021 was N148.6/litre but insisted that the agency has not hiked the product price as at present but was considering that maybe any time soon.
An ex-deport price is a rate at which the NNPC sells to retailers who later sell at the outlet stations to final consumers. According to Kennie Obateru, the spokesperson of the NNPC, “There is no increase in petrol price and our position is that the ex-depot price for petrol in March remains the same. So, no need to panic because there is no hike in price,”
In the last three year, NNPC has been the sole importer of petroleum into the country and they claim Nigeria consumes about 57.44 litres of petroleum every day going by the record released by the agency in its financial and operations report. Going by the difference in the present NN206.42 ex-deport price and the N148.6/litre former price provided by the PPPRA, the agency as at present pay a subsidy of N57.82/litre for each 1 litre of petroleum consumed by Nigerians.
Multiplying the quantity of daily consumption by the difference in the current price and the former and multiplying it with the number of days in March, the agency arrived at N102.96bn as a petroleum subsidy for the month. The spokesperson of the NNPC revealed yesterday that to avoid disruption in the supply chain of the product, “The minister and our group managing director had explained that the current pump price is not reflective of the market forces but that engagement is ongoing with labour on this issue.
Though he admitted that the price does not reflect the current reality of the market forces, however, the government is negotiating with organised labour on how to adjust the price anytime soon. He added that “But the fact is that the current pump price is not reflective of the expected market price for petrol. However, we have to agree with labour before taking any action.” However, the agency admitted that even if there is going to be an increase in the pump price it will certainly not be in this month of March.
