NEWS: NNPC May Adjust Petrol Pump Price on Falling Cargo Rates

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Chineme Okafor in Abuja
The Nigerian National Petroleum Corporation
(NNPC) may undertake a downward review of
the pump price of petrol in its retail outlets
across the country, THISDAY has learnt.
The paper yesterday gathered from an
authoritative source within the corporation in
Abuja that this was possible from a reported
consistent drop in the historical price of
petroleum cargoes from about $600 per
metric tonne to an average of $440 per
metric tonne.
NNPC had recently adjusted the pump price
of petrol at its outlets, thus raising fears of a
possible hike. The development also followed
claims in August by its former Group
Managing Directors that the government’s
pricing modulation framework was not
economical for the downstream petroleum
business.
The source however stated that the cargo
price is one of the key elements often
considered by the Petroleum Products Pricing
and Regulatory Agency (PPPRA) in its
calculation of the template for petrol pump
price.
This, he noted, has been on the downward
trend and could necessitate the corporation
reviewing its pump price to reflect the market
realities. The other key element being the
foreign exchange has been left floating by
the Central Bank of Nigeria (CBN).
He also explained that the corporation has
spent a lot of energies securing its petrol
supplies and distribution networks to keep
the country from what he described as
system sabotage during the yuletide season
by some marketers.
“One of the things we wanted to achieve is to
ensure that we do not have queues in this
time of the year and a lot of the energies
have been spent on securing that. If you look
at the market trend at the moment, we have
been fortunate. Historically, it is this time of
the year that cargo prices are about $500 to
$600 per metric tonne, and this is one of the
two key elements on the PPPRA templates
that nobody controls – it is down to market
forces,” he said.
According to him, “The cargo price is usually
between $500 and $600 per metric tonne, but
this year, we have even had cargoes for
$440. The pricing has been good. Our
network is a mix of the NNPC and others,
because of the open market forex policy, the
cost of doing business for others is higher.
What NNPC retail has done is to adjust the
price to accommodate the additional expense
of doing business around this time of the
year
“The N145 per litre is not just the margin but
includes freights and all sorts of other
expenses; we did that to accommodate the
expenses and as we get cheaper and cheaper
cargoes, we will adjust our prices in
accordance.”
Meanwhile, the Oil Producers Trade Section
(OPTS) of the Lagos Chamber of Commerce
and Industry (LCCI) has said about 50 million
standard feet per day (mscuf/d) of gas which
translates to $120 million revenue potential
and 150 to 200 megawatts (MW) of power is
being flared at oil fields in Nigeria.
A representative of the OPTS at the recent
consultative session for the draft National
Gas Policy, Mr. James Ajaifi disclosed this
during a panel discussion on the policy.
OPTS is the sectoral group for local and
foreign-owned companies registered in
Nigeria and holding an oil prospecting or oil
mining licence.
The group said the government would have to
address the issues of gas flaring in the policy
document to enable the country maximise its
gas resources for development.

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Posted in NEWS

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