The Petroleum Product Pricing Regulatory Agency announced on Tuesday that Filling stations belonging to the Nigerian National Petroleum Corporation will from January 1, 2016 sell petrol for N86 per litre, while other stations belonging to different groups of marketers will sell the commodity for N86.5 per litre, following approval from the Federal Government.
This information was disclosed by the Executive Secretary, PPPRA, Mr. Farouk Ahmed who stated that the reduction in the price of Premium Motor Spirit (petrol) was due to the revised components of the petroleum product pricing template for PMS and House Hold Kerosene.
The PPPRA boss also announced a three million metric tonnes of petroleum products to the NNPC and other oil marketers, in the first quarter 2016.
Ahmed said: “Since 2007, while crude oil price has been moving up and down, the template has remained the same. This 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 will be a quarterly review, and if there is any major shift, the Minister of State for Petroleum Resources will be expected to call for a review, either upward or downward.
“If there is no major shift, the price will continue from January to March 2016. In addition, there will be a Product Pricing Advisory Committee that will be set up to advise the PPPRA concerning movements in the price of crude oil.
“Consequently, the NNPC was granted 78 per cent of the total allocated volume for the first quarter, while the balance is to be supplied by other oil marketing companies. Marketers are required to note that there shall be a mid-quarter review of performance where volumes of non-performing marketers shall be withdrawn and reallocated to performing marketers.
“Furthermore, the PPPRA wishes to reiterate that consideration for participation in future allocations shall be on the basis of the attainment of 100 per cent performance in first quarter 2016. 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.”
On the issue of fuel subsidy, Ahmed noted that the new template would be reviewed quarterly with respect to the price of crude oil in the international market, adding that it was geared towards ensuring an efficient and market-driven prices of petroleum prices that would reflect current realities.