Petrol To Sell For N170 Per Liter As PPMC Increases Ex-Depot Price

From today, Nigerians would pay more to buy petrol as the Petroleum Products Marketing Company, one of the downstream subsidiaries of the Nigerian National Petroleum Corporation, on Friday, hiked the ex-depot price of Premium Motor Spirit, also known as petrol, by N7.50 per litre to N155.17 per litre.

Before the hike on Friday, the Ex-Depot price of a liter of petrol was N147.67.

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The development was confirmed in a memo from the Manager Marketing of the PPMC, Tijani Ali, to the Executive Director, Commercial, EDC, of the PPMC.

Ali in the letter said the new price would come into effect from November 13, 2020.

The ex-depot price is the amount at which the PPMC sells the commodity at the depot to retail outlets owners and fuel marketers across the country.

This means that at N155.17 per litre, marketers would be dispensing the product to motorists at between N167 and N175 per litre, from Friday, November 13, 2020

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The PPMC also put the Ex-coastal price of the commodity at N130 per litre.

The memo reads, “The EDC may please refer to the management directives in respect of the above subject (PPMC PMS prices for November 2020) as per the attached memo.

“In line with the above, we propose PPMC November 2020 actual prices for PMS with effect from 13th November 2020, as follows: PPMC Ex-Coastal Price for PMS N130 per litre; PPMC Ex-Depot Price (With collection) N155.17  per litre. Above is submitted for your consideration and approval.”

The Executive Director, Commercial, also sought the approval of the Managing Director the PPMC, saying: “Following your directive in the attached memo to advice the market of the change on PPMC portal, we hereby seek your kind consideration and approval for the change of price on the price portal.”

The Managing Director in his response, dated Thursday, November 12, 2020, gave the EDC the approval to effect the hike in the price of the commodity.

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The Executive Secretary of Major Oil Marketers Association of Nigeria, Clement Isong, had said Nigeria’s high foreign exchange rate was responsible for the rise in fuel prices.

He said importers of petroleum products are battling with access to dollar for their activities, adding that marketers needed access to foreign exchange to make the prices largely competitive.

The Executive Secretary had said this during an analysis on MOMAN’s perspective on pricing template, deregulation initiatives in the oil and gas sector.

Isong said that marketers major challenge has always been getting access to foreign exchange for importation of petroleum products.

He said, “In my sector, we mainly do not have access to foreign exchange at the I&E window rate of N387 per dollar.

“So we are unable to import PMS as price modulation has used the exchange rate to determine what the landing price should be and that is why basically only NNPC continues to import”

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Nigeria’s Minister of State for Petroleum Timipre Sylva, had announced government’s decision to adopt a price modulation mechanism which reflects the price adjustment of petroleum products.

Nigeria’s new deregulated price regime reflects the price adjustment of petroleum product
in the international market which had been hit by the Covid-19 pandemic.

Africa’s largest crude exporter also adopted a “fair pricing scheme” as succor for its over 200 million population.

But with gradual recovery of the global market, the demands for the product has been on the rise.

Oil prices have since average $40 to $45 dollar a barrel and has reflected in the pump prices of Africa’s most populous country.

In August and September the Petroleum Product Marketing Company fixed the ex- depot price of Premium Motor Spirit at N138.62 and N151.56 per litre respectively while pump price of fuel currently stands at about N161 per liter.

Isong pointed out that there are two main drivers of price in the importation of fuel into Nigeria. The drivers are the cost of crude oil outside Nigeria and the country’s exchange rate.

Isong said, “The country is broke, it really cannot afford to pay for subsidy. It is unfortunate that it has come at this time but I really do not think the country has a choice.”

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