Petrol may sell for less than N87 per litre – NNPC

Following the new template that the Nigerian National Petroleum Corporation (NNPC) is working out with the the Petroleum Product Pricing Regulatory Agency (PPPRA), premium motor spirit (PMS), popularly called petrol, may sell for less thant N87 per litre next year.

Addressing journalists on the new framework in Abuja yesterday, the corporation’s Group General Manager, Corporate Planning and Strategy, Bello Rabiu, said that as at Thursday, the cost of bringing one litre of petrol to the country was N65. The logistics for bringing it to the depot and to the filling stations, he said, is about N10.55. The distribution cost is N15.49 while the open market as at today is N91.52/litre.

Continuing, Rabiu said: “Now, if you take away N87, which is regulated price, it means that subsidy is basically N4.85. If we are consuming 41 million litres, it means we are subsidizing N200 million a day.”

In his analysis of how the Federal Government would reduce the cost of fuel importation, he said: “If we can look at this one that is N91.52 and we pray we can get about N15 off there, that will bring it down to a little more or less than N80. If we take off N10.50, we come down to N81. If we take it down to N7.52, we come down to N85.

“So you can see that the price we have today, if we look at the template can come down, and many Nigerians will believe that there is no subsidy.”

He added: “Looking at this cost of N91.52 per litre, you can see it is what has been in place since 2000 to 2002, which looks to have been over-inflated.”He said that government is now planning to optimize the cost of fuel for the benefit of the citizenry.

The Group General Manager said: “So, looking at the template itself, another thing we are doing is how we can optimise that one.

“As nature will have it, the market itself is reducing the cost because three years ago, this N65 cost of bringing to Lagos was actually about N71. Now it has come down to N65 and it will go down again.

“So, if we actually optimise that template and reduce the template, that will reduce the total cost of import and there will be no subsidy in the country.”

The Nation however learnt from one of those developing the new frame work for the management of the PMS subsidy that there are strong indications that the pump price may go for about N82 per litre.

According to him, “the government has already seen the possibility of reducing the cost by an average of N10.”

But Rabiu disclosed that the new Petroleum Products Pricing Regulatory Agency (PPPRA) would release its new price template before the end of first quarter next year.