PPPRC rules out fuel price hike as scarcity persists

www.vanguardngr.com By Hector Igbikiowubo Tuesday, March 18, 2003

Amidst persisting supply hic-ups at filling stations across the country, the Petroleum Products Pricing and Regulatory Committee (PPPRC) has said that it does not anticipate any price increases in the near future, pointing out that prices of petroleum products cannot be set with a war situation.

Major marketers and the Nigerian National Petroleum Corporation (NNPC), have indicated that landing cost of premium motor spirit (PMS) popularly called fuel is now N34 per liter with NNPC attributing the high cost to the gulf crises as well as the crises in Venezuela.

The secretary of the PPPRC, Dr. Olawole Oluleye told Vanguard that petroleum products prices have exhibited an upward swing lately because of the fear of war between Iraq and the United States of America.

But she reiterated the committee’s position on pricing saying that no immediate increase (s) was anticipated over the ongoing face - off between Iraq andUnited States.

On the recent report that major marketers are pushing for an increase in prices, she said that the major marketers are just one of the players in the sector and that they can not dictate to the committee.

According to Oluleye the federal government has a social responsibility to the people and would not sit idly and allow the people to suffer.

On the fundamentals that can lead to an increase in prices of petroleum products, she pointed out that they include the cost of crude oil, the exchange rate and cost of freight and insurance among others.

She however explained that since import prices of petroleum products and the local prices of petroleum products are at parity the major marketers cannot participate in the importation of petroleum products.

The communications manager of Unipetrol Nigeria PLC ,Tokumbo Durosaro while speaking with Vanguard reiterated the position of the major marketers saying that they cannot import petroleum products under the prevailing market situation .

It would be recalled that the managing director of the company, Adewale Tinubu, had while speaking on behalf of other marketers at a meeting with the NNPC canvassed this same position.

Other marketers who pleaded anonymity expressed similar sentiments, pointing out that landing cost of petroleum products in Lagos after cost freight and insurance have added up now to N34 per litre.

They maintained that at that rate it would be suicidal for any major marketer to import products under the prevailing price regime which has the price of pms pegged at N26 per litre.

It would be recalled that this was the reason why major marketers insisted at the meeting with the group managing director of the NNPC that they would rather have the corporation continue to import products and distribute to them.

Another industry operator who pleaded anonymity explained that it was wrong of the NNPC to try to demonize the major marketers by giving the impression that they have vowed not to import products.

The operator pointed out that since the NNPC gets allocated $450,000 barrels of crude oil per day at a cost of $18 per barrel, considering the prevailing market prices of crude oil , the corporation has no business complaining.

He also noted that the corporation has not been asked to account for the difference it was getting when Plat prices had not appreciated to the current level. He further pointed out that if the federal government really wants to create a level playing field, then it should also consider allocating crude oil to major marketers at $18 per barrel.