There are speculations that the price of Premium Motor Spirit, popularly called petrol, may sell for N170/litre, while the depot price is also expected to rise from its current price of N159/litre to N165/litre, oil marketers stated on Thursday.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) cautioned that the increasing cost of petrol at depots would ultimately result in the increase in pump price if left unchecked.
The dealers also raised concern over the supply of PMS, noting that many tank farms or depots do not have petrol, which was the reason why the few ones that had the product increased the price from the approved N148/litre price to N159/litre.
The Nigerian National Petroleum Company (NNPC) Limited however maintained its position that it had sufficient petrol to last the country all through the festive season and beyond.
IPMAN and PETROAN members own bulk of the filling stations across the country and make purchases from depots before selling to final consumers at their various retail outlets.
Explaining the reason behind the rising cost of petrol at depots, owners of the facilities stated that it was due to the recent agreement reached by key stakeholders in the downstream oil sector had yet to be effected by the Federal Government.
The NNPC had last week, accepted to return to naira-denominated invoices for excess capacity for coastal movement using the Investors and Exporters window rate for the time being, but this had yet to be implemented.
The depot owners had contended that the payment of the charges in dollars was a key obstacle to their effective involvement in products distribution, stating that this had resulted to scarcity in many cities.
On the likelihood of an imminent increase in the price of petrol, the National Public Relations Officer, IPMAN, Chief Ukadike Chinedu, stated that it was inevitable if the current increase in depot price persists.
When asked if the high depot cost could lead to an increase in pump price, he replied, “Yes, because if you look at our profit margin, you will realise that it is regulated and fixed.
“And they (government) often talk about deregulation. But you cannot do deregulation in a regulated market. There is a band and you say you are doing deregulation.
“So for marketers, any moment from now, we will be pushed to take the band above N165 to N170 if this situation continues.”
Chinedu further argued that there had been problems with product availability, contrary to the position of the NNPC that it had enough petrol that would last for months.
The IPMAN spokesperson said, “I want you to know that the availability of petrol is a problem. Most tank farms don’t have products. And the place to go and buy product is from the few ones that have.
“And as a result, profiteering will set in and they will be selling at N159 to N160/litre. You (marketers) will now consider moving the product to your filling stations, particularly for marketers who don’t get bridging claims.
“Now this marketer will pay close to N100,000 to be able to send the product to his station. Now when the product gets to his station, that product’s cost is almost at N163/litre. So, will he use only N2 margin to sell petrol, knowing that he will pay staff, power bill, taxes, etc?”
Chinedu added, “Marketers should not be held responsible when the pump price increases. Many tank farms don’t have products. So marketers don’t have any option because if they buy, they sell.
“If there is surplus you will see marketers selling at N162/litre or below, but right now you hardly find anyone selling at that price. I also want to let you know that by next week, products will be close to N165/litre at depots.”
The President PETROAN, Billy Gillis-Harry, confirmed the position of IPMAN, noting that retailers of petrol at filling stations would adjust their prices upwards beyond the N165/litre if depots continued to sell at unapproved rates.
He said, “Private depot owners have increased their prices arbitrarily by themselves. Most retail outlets are very disciplined now by keeping the pump price within the band.
“But if the depots keep maintaining the N157 to N159/litre as they are doing, there will be no choice for retail outlet owners but to also add the commensurate price to it. That’s the reality.”