…PMS Pump price Increase

By Mathew Dadiya & Tony Obiechina (Abuja) & Dan Amasingha, Minna

Motorists and commuters, yesterday expressed disenchantment and disgust over the further rise of premium motor spirit, popularly known as petrol from N 540 to N617 and N620 by filling stations in Minna.

DAILY ASSET Correspondents that monitored the situation observed that, most motorists were caught unaware by the upward price review.

At the NNPCL mega stations along Western bypass in Minna the product was selling for N617, but some other major marketers are selling for N620 as at the time of filling this report.

A Motorist at one of the stations who simply identified himself as  Saidu simply  said  it is outrageous that at a time that inflation is at an all time high, this government under the quite of soaring up revenue earnings are impoverishing Nigerians.

“How can you just come to power and further inflict pains on Nigerans beyond the nightmare we went through in the hands of the past government.

“If they are trying to boost the economy is it when we are all dead from the draconian economic policies, that lack human face,” he asked angrily.

Surprising a fuel attendant at a popular filling station opposite NECO computer centre in Minna described the incessant increase of fuel prices as bad businesses for filling stations.

He noted that, the purchasing power of most Nigerians has significantly reduced in the last few months noting that, increasing the price by N77 will further worsen the already bad situation for Nigeria.

According to him, the administration of President Ahmed Bola Tinubu is grappling with the economic realities of the country, but it is now apparent that Nigeria is not Lagos.

“We were been told that he will replicate the developmental model he did for Lagos at the centre, but it looks as if Nigeria is more complex than he envisage,” he said.

Transporters on their part has adjusted the transport fares to reflect the new realities as a trip from Minna- Abuja that cost about N4, 500 is now going for N6,000.

Minna – Kontagora which peaked at Four thousand Naira just on Monday has been increased to five thousand five hundred Naira while, the popular Minna – Suleja route has jumped up from two thousand five hundred Naira to Three thousand five hundred Naira.

Commuters and motorists, who spoke on the matter in Abuja, said the policies of the current administration are becoming very harsh on the citizens.

A commuter, Tickson Kusugh, who works with Gilmor Construction Company, said the current administration is leading Nigerians to hell.

A motorist, Uchenna Matthew, who spoke to our correspondent, also criticised the Tinubu administration for taking decisions that have negative impact on the lives of those that voted him to power in less than two months in office.

“The whole rush here is because Mobil has not increased their price. I don’t know the kind of hardship these people are putting us through. They said NNPC has adjusted their price, we are buying here at 540, but they are about to adjust their price.

“We still have the grace to buy at 540; any moment from now it will be increased. This current administration is leading us to hell. Even the animals in the bush are feeling it. The earlier they discharged this government and install the original government that won the election, the better for us,” he said.

Also, a taxi driver, Mohammed Sani, said that Nigerians are suffering due to the increment.

“At NNPC, it is written 617 on their board. They are likely going to increase their price here at Mobil. The situation is very bad; the masses are suffering. The situation is very hard, it is not easy for a poor man to go out not to talk about eating food,” he lamented.

Also yesterday, motorists and commuters in Ibadan have expressed shock over the new pump prices of Premium Motor Spirit (PMS), otherwise known as petrol, announced on Tuesday by the Nigerian National Petroleum Company Limited (NNPCL).

Our correspondent, who moved round the Ibadan metropolis, observed that as the news of the fuel price increase filtered out, some filling stations hurriedly closed shop, with their managers saying that they were awaiting further directives from the authorities.

It was gathered that the few filling stations that were selling the product witnessed long queues of vehicles, while they were selling for between N560 and N650 per litre.

A motorist, Mr Anu Alani, said he woke up yesterday to see that many filling stations were not open for business, and those who were selling increased their price to N650 per litre.

“I was thinking that when I go farther, I would see where I could buy fuel at the normal price, but I didn’t. I don’t know what to do again, as the economic situation is already bad,” Alani said.

Another motorist, Mrs Ayoola Olaoba, said that she would have to find a means of leaving the country, as things did not look like they would get better soon.

“I bought fuel some days ago at N520, only for me to see some of my colleagues saying it has increased to N620. I said just like that! I do not think I can continue with the uncertainty trailing the present economic situation,” she said.

A commercial motorist, Mr Gbenga Oriowo, said that the new price would definitely have an attendant effect on transport fares.

“I am still in the queue now, and there is little or no probability that I will get fuel, and even if I get it, I cannot but increase the transport fare. We will all have to bear the situation,” he said.

Oriowo said that government needed to explain to Nigerians what was going on and the rationale behind the new price regime.

Another motorist, Mrs Funmi Alli, said some major marketers had closed their filling stations, saying that this had contributed to long queues where the fuel was available.

She expressed the fear that the fuel price increase would have a spiral effect on food prices and everything else, which might increase the hardship already being faced by Nigerians.

NNPC Attributes Hike to Market Forces

The Nigeria National Petroleum Corporation Limited (NNPCL) has reacted to the sudden increase of fuel pump prices from N540/liter to N617/liter, saying its merely the market forces at play

Group Chief Executive Officer of NNPCL, Mele Kyari explained yesterday, after meeting with the Vice President, Kashim Shettima at the Presidential Villa Abuja.

According to Kyari, the problem is not a shortage of supply of products, rather forces of demand and supply in the marketing value chain were simply taking effect.

He said importers of fuel products were gaining confidence in the system, noting that prices were bound to go up or down from time to time.

Kyari, who spoke to reporters, said, “I don’t have the details this moment.  But we have the marketing wing of our company.  They adjust prices depending on the market realities. 

“This is really what is happening; this is the meaning of making sure that the market regulates itself so that prices will go up and sometimes they will come down.  This is what we have seen and in reality, this is how the market works”.

Asked if there was a shortage of products in the market to have warranted the increase, he responded by saying, “No.  there is no supply issue completely.  When you go to the market, you buy the product; you come to the market you sell it at the prevailing market prices.  Nothing to do with supply shortage, we don’t have supply issues.  There is a robust supply.  We have over 32 days of supply in the country.

“Yes, what I know is that the market forces will regulate the market.  Prices will go down sometimes; sometimes they will go up.  But supply will be stable and I am also assuring Nigerians that this is the best way to go forward so that we can adjust prices when market forces come to play.

“I don’t have the details at this moment, but I know that our marketing wing acts just like every other company in this business. I know that several companies have imported petroleum products today.  So, many of them are online.  I’m sure my colleague would confirm this.  Market forces have started to play; people have started having confidence in the market.  Private sector people are importing products, but there is no way they can recover their cost if they cannot take market reflective cost”.

Corroborating the NNPCL Chief Executive, Farouk Ahmed, CEO, of the Nigerian Mainstream and Downstream Petroleum Regulatory Authority (NMDPRA) debunked insinuations that the new price adjustment was set by the NNPCL.

“As a regulator, I told you back in May that we are not going to be setting the price.  The market will determine itself and as you saw back in early June when prices came out, it was based on the cost of importation plus other logistics of distribution and course the profit margin by the importer.  This market is deregulated; it is open to all participants. 

“As I mentioned yesterday when I was in Lagos, we have about 56 marketing companies that applied and obtained licenses to import.  Out of those, 10 of them have indicated to supply within the third quarter, which is July, August, and September. 

“Already, we received some cargo from these marketers: Prudent Energy, AYM Shafa, and Emadeb.  Emadeb Cargo is arriving tomorrow.  So, this is just an encouragement to see that the market is liberated and everyone is free to import so long as you are working within the framework, especially in terms of quality.  But on pricing, as a regulator, we are not going to put a cap on the price because we are not part of those importing. We are not a marketing company; we are just a regulator.

“So, when you say market forces are working what it is that you buy; you consider the price of crude going up.  A couple of weeks ago, the price of crude was hovering around $70/barrel. 

“Now it’s hovering around $80/barrel.  So, the crude price also drives the product price.  You know, because the importers are importing, they are basing it on the cost of importation plus the freight and other cost elements in terms of local distribution,” Ahmed said.

IPMAN Blames Dollars’ Cost for New Price

The Independent Petroleum Marketers Association of Nigeria (IPMAN) National President, Chinedu Okoronkwo yesterday explained the sudden hike in the pump price of petroleum products in Nigeria.

Okoronkwo blamed the sudden hike in the pump price of petrol on the cost of dollars.

He explained that petroleum products are imported to Nigeria using dollars, hence the increase.

Speaking on Arise Television, the IPMAN National President advocated the use of Compressed Natural Gas, CNG, as an alternative to petrol.

According to Okoronkwo: “This business is done with dollars, remember the rate of dollars now is in one window and not like we had several others, where CBN will give around N400 while the black market will be around the region of N700 but now there is no more second window.

“Today the dollar is around N800 and in a deregulated regime, what determines the price of anything is the cost. The product is not refined here, everything is imported.

“If we want to achieve something, there are other alternatives we have proffered. The CNG is something this nation needs to seriously look into; so it would be a matter of choice if you want to use gas or petrol.

“The price has really gone up because of the fundamentals in the market which has to do with the dollars.”

The NNPC, on Tuesday, increased the pump price of petrol to about N617 per litre.

This is coming shortly after the petrol price was increased to over N500 per litre following the removal of fuel subsidy.