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 The federal government yesterday reduced the pump price of petrol from N87 to N86.50k per litre. In a statement signed by the‎ executive secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA) Farouk Ahmed in Abuja, FG said that the Nigeria National Petroleum Corporation (NNPC) retail stations will sell at N86 per litre, while retail outlets owned by oil marketers will sell at N86.50k per litre. ‎

The new price follows the approval of the minister of state for petroleum resources Dr. Ibe Kachikwu. The statement adds that the new price will remain till March 31, 2016.

    “This is not static; there will be a quarterly review of the pricing template. However, if there is any pricing shift, the minister of state for petroleum resources may call for a review upwards or downward depending on the market condition but for at least the first quarter of 2016 the price will be N86.50/litre while for NNPC it is N86/litre,” he said.

The Nigerian Labour Congress said, however, that it would resist with all its might, any attempt to remove fuel subsidy.

Speaking to newsmen in Abuja, Executive Secretary of the Petroleum Products Pricing Regulatory Agency, PPPRA, Mr. Farouk Ahmed, also announced the first quarter 2016 PMS import allocation of three million metric tonnes to the NNPC and other oil marketers.

On the review of the price of petrol, Ahmed said the reduction in the price of the commodity was due to an implementation of the revised components of the Petroleum Products Pricing Template for PMS and household kerosene.

According him, the revised template, which would be reviewed on quarterly basis and which would soon be presented to oil marketers, is geared towards ensuring an efficient and market-driven price that would reflect current realities.
 
He said: “Since 2007, while crude oil price had been moving up and down, the template remained the same. This had made it necessary for us to introduce a mechanism whereby the template would be sensitive to the price of crude oil.

“However, the template is not static, as there would be a quarterly review and if there is any major shift, the Minister of State for Petroleum Resources would be expected to call for a review, either upward or downward, depending on the market condition.

“If there is no major shift, that is, if there is a marginal change, the price would continue from January to March, 2016. In addition, there would be a Product Pricing Advisory Committee that would be set up to advise the PPPRA concerning movements in the price of crude oil.”

He said the NNPC would sell lower than other oil marketers, due to the fact that it is cheaper for it to import, compared to the independent and major oil marketers.

He listed the major components affected by the review in the pricing template to include: Traders Margin, Lightering Expenses, Nigerian Ports Authority (NPA) Charges, Jetty Throughput and Storage Charges, as well as Bridging Fund. Other components include: Retailers, Transports and Dealer margins.
“Accordingly, the PPPRA hereby warns that any marketer found selling above the PPPRA approved price shall be appropriately sanctioned. These include, but not limited to, exclusion from future participation in product importation and revocation of licences.”