FG increases petrol price to N140/litre as Brent stabilises at $42/barrel

Petroleum Products Pricing Regulatory Agency (PPPRA) has announced a new pump price band of N140.80 and N143.80 per litre for petrol as Brent, the oil against which Nigeria’s crude is priced, settled around $42. In a statement on Wednesday, the PPPRA’S executive secretary, Abdulkadir Saidu, reveals that the Guiding price comes into effect from July 1, and is expected to apply at all retail outlets nationwide for the month. “After a review of the prevailing market fundamentals in the month of June and considering Marketers realistic operating costs as much as practicable, we wish to advise a new PMS pump price band of N140.80- N143.80/ litre, for the month of July 2020,” Saidu states in a circular to fuel marketers dated July 1, 2020. The adjustment, BusinessDay learns, is in line with the Federal Government’s approval for a monthly review of Premium Motor Spirit (PMS) pump price. The PPPRA’S boss notes that the ex-depot for collection includes the statutory charges of Bridging Fund, Marine Transport Average, National Transport Allowance (NTA) and the administrative charge. The increase in PMS comes after Brent futures stood at $41.15 a barrel in London on Wednesday, having more than doubled since late April as a result of Organisation of Petroleum Exporting Countries ( OPEC’S) intervention and a revival in demand. The Federal Government, in March, announced that the retail price of petrol would be adjusted monthly to reflect realities in the global crude oil market. The pump price was fixed at N125 per litre in March and was reviewed downwards in April to N123.50. In May, only the exdepot price was reviewed downwards to N108 and the retail price was adjusted to N121.50 in June. Since the introduction of the regime, marketers had expressed concerns over the issuing of monthly guiding prices for petrol. Responding to this last week, Saidu argued that different sectors of the economy operate under the guidance of national regulators. He said, “The Central Bank of Nigeria regulates the banks and other financial sector operators; the Nigerian Communications Commission regulates telecommunications and the same exists for operators in Nigeria’s downstream petroleum sector. Saidu noted that while the market-based pricing regime was a policy introduced to free the market of all encumbrances to investment and growth, it should not be misconstrued to mean a total abdication of government’s responsibility to the sector and citizenry. Over the years, international firms have pulled out of Nigeria’s downstream sector as government control crimps margins and takes away the shine from a once buoyant industry. It costs about N200 million to build a new petrol station, but the margins are no longer enough to sustain the sector with many dealers going burst or facing massive debt pile.