Following the new template that the Nigerian National
Petroleum Corporation (NNPC) is working out with the the Petroleum Product
Pricing Regulatory Agency (PPPRA), premium motor spirit (PMS), popularly called
petrol, may sell for less than N87 per litre next year.
Addressing journalists on the new framework in Abuja
yesterday, the corporation’s Group General Manager, Corporate Planning and
Strategy, Bello Rabiu, said that as at Thursday, the cost of bringing one litre
of petrol to the country was N65. The logistics for bringing it to the depot and
to the filling
stations, he said, is about N10.55. The distribution cost is
N15.49 while the open market as at today is N91.52/litre.
Continuing, Rabiu said: “Now, if you take away N87, which is
regulated price, it means that subsidy is basically N4.85. If we are consuming
41 million litres, it means we are subsidizing N200 million a day.”
He dropped the hint that the cost is now reducing naturally
because the present importation cost of N65 was N71 about three years ago and
with the review, a new template would indicate that there is no need for
subsidy in Nigeria.
In his analysis of how the Federal Government would reduce
the cost of fuel importation, he said: “If we can look at this one that is
N91.52 and we pray we can get about N15 off there, that will bring it down to a
little more or less than N80. If we take off N10.50, we come down to N81. If we
take it down to N7.52, we come down to N85.
“So you can see that the price we have today, if we look at
the template can come down, and many Nigerians will believe that there is no
subsidy.”
He added: “Looking at this cost of N91.52 per litre, you can
see it is what has been in place since 2000 to 2002, which looks to have been
over-inflated.”
He said that government is now planning to optimize the cost
of fuel for the benefit of the citizenry.
The Group General Manager said: “So, looking at the template
itself, another thing we are doing is how we can optimise that one.
“As nature will have it, the market itself is reducing the
cost because three years ago, this N65 cost of bringing to Lagos was actually
about N71. Now it has come down to N65 and it will go down again.
“So, if we actually optimise that template and reduce the
template, that will reduce the total cost of import and there will be no
subsidy in the country.”
The Nation however learnt from one of those developing the
new frame work for the management of the PMS subsidy that there are strong
indications that the pump price may go for about N82 per litre.
According to him, “the government has already seen the
possibility of reducing the cost by an average of N10.”
But Rabiu disclosed that the new Petroleum Products Pricing
Regulatory Agency (PPPRA) would release its new price template before the end
of first quarter next year.
According to him, there is zero budget for fuel subsidy in
the 2016 budget plan because the new adjustment that will lower the cost of
product importation will make subsidy unnecessary.
He noted that there is no hope that the price of crude will
rise in the next few years as Iran which had been on suspension will soon
resume production.
He said that since the country has not been consuming up to
the acclaimed consumption level it means that the Federal Government has been
paying much more than what it should pay for subsidy.
“We are trying to ensure that we pay for only what the
country consumes,” Rabiu submitted.
The Managing Director, Petroleum Pipelines & Products
Marketing Company (PPPMC) Limited, Mrs Esther Nnamdi-Ogbue, dropped the hint
that the “new price will be to the benefit of every Nigerian and there is no
cause for alarm.”
Saying that Kaduna Refinery and Petrochemical Company will
begin production today, she noted that the Atlas Cove and Mosimi pipelines are
now functional while the PPMC is making efforts at operationalizing the line
from Ibadan up to Ilorin.
At the moment, she said, the Federal Government produces
seven million litres of PMS from local refineries.
The company’s boss said “the good news is that for the first
time in the past 100 days, we have crude being pushed from Warri to Kaduna.
“We also have Atlas Cove Mosimi line working. Kaduna is
ready to start up. I am sure by tomorrow (Saturday), we will start production
from our refinery in Kaduna.”
She attributed the feat to the engagement of a private
security guard company to carry out surveillance on the pipeline, adding that
the partnership with the Department of State Security (DSS) has yielded
positive results.
Her words: “It now reduces the burden of trucking all the
way from coastal town to the hinterland. We also have efforts being made not
only to Mosimi but to Ibadan and Ilorin, and that will also reduce a lot of
tension.
“Why have we done that? We have brought in private security
companies to guard our pipeline. Then, we had joint task-forces but we still
had our lines being compromised.
“The security outfit that manages the pipelines has recorded
success and quite a number of the vandals have been handed over to the security
agencies.
“We also have collaboration with the DSS and this has also
yielded great results.”
She said that between now and the end of the month, there
are 12 vessels of products coming in with at least 30,000 metric tonnes each,
stressing that there will be a ‘queueless’ Yuletide in the country.
–The Nation
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