By Femi Asu
Against the backdrop of the rise in the landing costs of petroleum products, fuel marketers are anticipating an increase in the pump price of Premium Motor Spirit, popularly known as petrol.
The expectation of a price hike was triggered by the recent upturn in global crude oil prices that had forced several countries, including Mexico and the United Kingdom, to increase the pump prices of petroleum products.
The Federal Government had on May 11, 2016 announced a new price band of N135 to N145 per litre for petrol in what was described as a partial deregulation of the downstream sector.
Industry sources told our correspondent on Wednesday that the increased landing cost had further hampered the marketers’ ability to import products amid persistent foreign exchange scarcity.
A source, who is an executive in a Lagos-based marketing company, said the landing cost of petrol had risen above N200 per litre, as crude oil price neared the $60 per barrel mark.
He said, “Even the NNPC cannot import; they are using the offshore processing agreement with foreign refineries to bring in products. They cannot import at this level to come and sell at N131 to the marketers.
“The OPA is not as if you are buying at the current rate; there is an agreement between the refineries to get these products at a price less than what would have been the landing cost.”
He noted that the government failed to heed calls for a full deregulation when oil price was trading below $40 per barrel last year.
The source added, “Government has two options: It is either they increase the price and face the wrath of Nigerians, or they continue to absorb the subsidy and allow the NNPC to be the sole marketer again.
“Most marketers are expecting that any time soon, there could be price changes; even some of them are not too keen to sell what they have.”
Asked if the government was talking to the marketers about price review, he said, “As far as the PPPRA is concerned, it is one issue that they won’t want to discuss with any marketer. If you raise it, nobody wants to respond.”
A top official of the Petroleum Products Pricing Regulatory Agency noted that almost all the marketers were getting petrol from the NNPC.
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