N700/Ltr: IPMAN Cautions NNPCL Against Futher Hike In Petrol Price

EKO HOT BLOG reports the Independent Petroleum Marketers of Nigeria (IPMAN) yesterday cautioned the Nigerian National Petroleum Company Limited (NNPCL) against further increase in petrol price.

Its National Vice-President Abubakar Maigadi warned that further increases would not favour the market especially now that the demand for the product has dropped.

He said: “We are waiting for the new consignment of petrol for July to come before we can know what NNPCL plans.

“But it is not good for there to be a change of price in July. This is just our advice. It will not augur well when they change the price. We are advising NNPCL not to change the price.”

But IPMAN’s National Operations Controller, Mike Osatuyi, described the current petrol prices as transitional.

Osatuyi said the prices may rise to N700 in some parts of the country beginning tomorrow.

He said: “The petrol being sold now is old stock- the ones on the high sea, tanks and filling stations- they are all stocks ordered before the subsidy removal.

“Right now, nobody has imported petrol. People who want to import have to go and source for Forex on their own. We are trying to access funds and place orders for the product. Delivery cannot be earlier than 28 days after an order.”

On why prices may hit N700 per litre, Osatuyi said: “With a current exchange rate standing at N770 to a dollar today, if you now configure that into the template of $70 a barrel of crude, what do you think that will translate to? A 45, 000-litre tanker of petrol now comes at N23 million.

“Based on a template we have worked, Lagos price will be about N610 a litre and in the farther parts of the country like Maiduguri, it will be like N700. This price will be the basic. Anybody with a superior argument should challenge me.

“The current price of petrol we are buying is a ‘’transition price’. We are not even talking about the VAT (Value Added Tax) that has been gazetted on all petroleum products. So, once that is affected, then it has to be added to the litre price. I don’t want to create panic that’s why I left it at N700.

“Even the NNPCL price per litre will still increase because of the new forex rate at which the firm will import petrol.

“Remember that NNPCL is now operating as a company; it won’t enjoy crude oil swap deals again; it will buy forex at the same price as us. There is no more arbitrage in the sector. It is now how each marketer is able to drive his efficiency that will bring down his cost and the quality of service rendered.”

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