The Nigerian National Petroleum Company Limited, NNPCL, has given reason why petrol pricing in Nigeria cannot be compared with other developed markets. This, it said, is because Nigeria still modulates pricing to support general affordability.
This was disclosed by the Executive Vice Chairman, Downstream, Nigerian National Petroleum Company Limited (NNPCL) Engr. Dapo Segun. He said Nigeria is still not operating full pricing of the Premium Motor Spirit (PMS), otherwise known as petrol. The Vice Chairman noted that the full pricing of the product explains why Nigeria cannot be compared with other climes.
He said, “Petrol prices are higher in other countries because they are solely market driven.
“But the opposite is our situation. We’re not at a full market-pricing of PMS yet. That’s why the behaviour of PMS prices in Nigeria cannot be compared to those markets where the prices are fully market-based.
“And if you’re going to do a comparison, you want to check out the equivalence of those prices you see in those climes. And compare their prices here, you’ll find that they’re still way higher than the prices we are offering when you bring them to common currency.”
Segun clarified that petrol availability remained scarce in some cities despite recent pump price hike. This is even as many retail outlets have been recalibrating their meters due to the increase in retail pump price.
He noted that it takes some days for the filling stations to get the meters recalibrated.
Segun, however, expressed optimistic that in a few days the queues will disappear.
He said, “When you have a situation, when you have a price change situation, it takes a few days for all the filling stations to recalibrate their meters. And that is basically the situation we are in now.”
The Vice Chairman stated that petrol prices are largely determined by seasons. He noted that there are bound to be higher prices in winter due to increased demand for energy than in summer.
“During the summer months, prices are high because it’s a driving season. In the winter months, your prices come down and things like that. So, that’s what the PIA provides for, and prices should move with the seasons,” Segun said in an interview on Arise News Morning Show.
He stated that the NNPCL has been working hard to ensure that the product is delivered to marketers by opening early and closing late.
Segun also added that the state-owned filling station is working hard to prevent diversion of the petrol to unscheduled destinations.
“We are working with all the marketers. Engaging with them to ensure our fuel marketers fuel stations open early and close late. And to make sure that there is fuel in all of the filling stations. So, we are ensuring that deliveries are made to stations
“And we are doing our best to ensure that there are no diversions…
“I expect that this will fizzle out within the next few days as more stations calibrate and begin to sell.
“If you look in section 12 (5) of the PIA and that is the Act that gave birth to NNPCL, it tells you that petroleum prices of fuel prices will base on unrestricted market conditions.”
Speaking on debt owed to PMS suppliers, Segun said NNPCL has a good relationship with the refiners. This, he said, is because it has earned their confidence over the years. He, however, admitted that there may be challenges, blamed it all on forex illiquidity in the market.
He noted that that notwithstanding, NNPCL is making payments to the suppliers
“We do what we can to make sure that we are within the confidence of our suppliers.
“I can assure you that our suppliers have confidence in our ability to pay. NNPCL has never defaulted in making its payments. And that is why our suppliers continue to back us up,” Segun said.
source: The Nation
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