The Federal Government may soon effect an upward review in the pump prices of Premium Motor Spirit, popularly known as petrol, oil marketers have said, attributing this to the recent increase in the cost of crude oil at the international market.
Crude oil price had fallen below $30 per barrel earlier this year, but as of May 2, 2016, the commodity’s cost rose to $45.83, according to data obtained from the Nigerian National Petroleum Corporation on Saturday in Abuja.
The oil marketers also told our correspondent that the current challenge they faced in the industry was how to sustain the improvement in the supply of petrol across the country.
They said they had started importing petrol as many oil majors and a few independent dealers were accessing the United States dollars, as promised by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.
The Corporate Affairs Manager, Nipco Plc, a renowned oil marketing firm, Mr. Lawal Taofeeq, stated that the petrol subsidy issue must be managed properly by the government in order to ensure adequate sustenance of the present improvement in fuel supply across the country.
He noted that the marginal rise in the price of crude oil could force the government to review the pump price of petrol upwards, particularly should the government insist on not paying petrol subsidy to oil marketers.
Taofeeq said, “We’ve started importing products. But on sustenance, it depends on how the government handles the issue of subsidy. You know subsidy on petrol has returned and its management will go a long way in affecting fuel supply.
“Before, there was no subsidy on petrol. But now, considering the rise in crude oil price, there is subsidy despite the fact that the official pump price hasn’t been changed. So, if the subsidy issue is not managed properly, marketers may not want to import the product unless they are sure of their money.
“The government has been using the price modulation technique, and as crude oil price is going up, it will be adjusting the pump price of petrol. Any moment from now, there may be an upward review in the pump price of petrol to take care of the rise in the price of crude oil in the international market.”
Taofeeq stated that although petrol supply had improved considerably, some filling stations had yet to start getting the product seamlessly.
He said, “The level of supply has improved but you still find out that in some areas, not all the petrol stations dispense the product. All the stations cannot have fuel at the same time. For instance, on Ikorodu Road in Lagos, you still find queues in front of some petrol stations.
“This is because not all the outlets on this road are dispensing fuel as of today (Friday). The supply mechanism cannot take or get to all the stations in one day. Some may have to hold on for about four to five days before it gets to them. And when it gets to them, others may have exhausted their product. That is why you see queues in some places.”
The Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Obafemi Olawore, stated that the NNPC had ensured that petrol dealers would get the product, adding that many marketers had also started importing the product.
On the measures so far put in place by oil marketers to stabilise and sustain supply, Olawore said, “That is the challenge all of us face now. The sustenance is now the issue but we will try to sustain it.”
When asked if marketers had started accessing forex for petrol importation, he said, “The issue is that they (government and the NNPC) have spoken with the upstream companies. These companies are helping some majors. And the NNPC, on its own, is helping some majors as well as other marketers.
“The NNPC has done a lot. Let us give it to them because they’ve truly done a lot. We have also been bringing in the product but majority of the vessels were brought in by the NNPC. That is why I say it is right for dealers and consumers to laud them this time around.”