Petrol price template crumbles

The Petroleum Products Pricing Regulatory Agency (PPPRA), which controls the cost of petrol in the country, is in disarray and this is disrupting the implementation of the existing pricing template.

The Guardian learnt in Abuja yesterday that the disruption in the system is caused by a lack of mechanism for a quarterly price adjustment, absence of a board and failure by government to appoint a substantive executive secretary. It was learnt that these factors have contributed more to the collapse of the pricing template than the lack of forex for fuel imports. The current open market price of petrol is above the N145 per litre.

The rising cost of crude oil in the international market has renewed pressure on government to increase the pump price as subsidy is staging a gradual comeback. The Nigeria National Petroleum Corporation (NNPC) has almost become the last resort in the supply chain following the inability of independent marketers to access foreign exchange for fuel imports.

The Guardian reported on Tuesday that scarcity was imminent and pump prices set to rise as marketers failed to repay their $1 billion debts with commercial banks. Government abruptly halted the subsidy regime without paying for previous imports as agreed with the PPPRA. Consequently, the fuel import loans contracted from 2014 incurred additional N160 billion, approximately $500,000 as interest.

The Guardian, January 12, 2017

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