As Nigerians await the full compliance of regulated price of Premium Motor Spirit (PMS) from N167 per litre to N162 per litre, cost elements in the Petroleum Products Pricing Regulatory Agency (PPPRA) Template shows that the Federal Government is defrauding Nigerians.
Recall, on November 15, 2020, the Nigerian National Petroleum Corporation (NNPC) announced an increase in Ex-depot price for PMS from N147.67 to N153.17 per Litre which resulted in the hike in retail price from about N160 to N167 per Litre.
On November 16, 2020, NLC rejected the fuel price increase and demanded immediate reversal.
On November 26, 2020, the Federal Government met with labour and requested for one week to consult stakeholders for a possible reversal of the announced price.
By December 8, 2020, Government met with the labour leaders and announced a N5 reduction in PMS price effective from December 14, 2020.
The Minister of Labour informed the nation that, the reduction did not interfere with the deregulation of the downstream petroleum sector as the cut is on areas where NNPC and other stakeholders have agreed to cut cost such as demurrage, freighting etc.
Meanwhile, the 2020 PPPRA Template shows that there was no justification for the increment in the first place.
If you juxtapose the PPPRA template in March, 2020 with that of November, 2020, you will discover 30% increase in cost elements.
The total landing cost of PMS as at March, 2020 was N124.52 and the total expected open market price was N140.53.
In November, 2020, the total landing cost of PMS increased to N127.78 while the total expected open market price also increased to N146.75.
TheFact Nigeria confirmed that Even with the marginal increment in Jetty Thru’put Charge, Storage Charge, Wholesalers Margin, Admin Charge, Transporters Allowance, Retailers Margin, Bridging Fund and Distribution Charges, the price was not supposed to be more than N150 per litre.
The big question however, is how did the federal government arrive at the N167 per litre before the proposed N5 reduction and which agency of government is in custody of the gains made?
Speaking to some selected media practitioners and Civil Society Organisations (CSOs) at a Workshop in Abuja, the Former Chief Operating Officer/Group Executive Director, Upstream Business Unit, NNPC, Alhaji Rabiu Bello blamed the irregularities on weak regulation and lack of genuine template in the sector.
Bello queried, the 30% increase in cost elements in PPPRA template between March and November 2020; The difference between calculated open market prices (based on the template) and actual current pump price.
He inquired to know the stakeholders consulted by the federal government and NNPC prior to the N5 reduction and whether the stakeholders and NNPC were overcharging Nigerians previously vis-a-vis the sustainability of the decision.
The former GED said, the total cost of importing PMS into Nigeria is today unknown to Consumers, adding that
PPPRA reneged on its responsibility to monitor the market and advise NNPC and other marketers on the appropriate guiding prices of PMS on a monthly basis.
He said, provided profit margins are guaranteed for market players, a transparent Price Cap must be emplaced on PMS to protect and earn consumer confidence.
He said, provided NNPC remains the only importer, Nigeria should develop a strategy for importing PMS at minimum cost from the international market and sharing same to all wholesalers for domestic supply at competitive prices.