Nigeria hikes petrol price to N143.80 for July 2020

*Prices to be fully determined by market forces, states PPPRA

Isola Moses | ConsumerConnect

The Federal Government has increased the pump price of petrol, popularly called Premium Motor Spirit (PMS), to between N140.80 and N143.80 for July 2020.

The development is considered by industry analysts as one of the highest price movements in the last months.

Mr. Saidu Abdulkadir, Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), in the circular to marketers on the new price Wednesday, July 1 warned them against selling above the N143.80 set by the government.

Industry analysts say Wednesday’s increase remains the single highest price movement since the government said it had fully deregulated the downstream sector of the nation’s economy.

However, the PPPRA still ‘modulates’ or advises on a price band for every month.

According to the agency, with the removal of the existing cap on fuel prices, prices would be fully determined by market forces.

The Federal Government had reduced the price of petrol, setting the new price band for the product at between N121.50 and N123.50 per litre in June, although all the filling stations continued to sell at the maximum price set by the PPPRA.

Mr. Timipre Sylva, Minister of State for Petroleum, recently stated that “prices can go up and will go up. That’s why we are in the race to introduce CNG (Compressed Natural Gas) which is a cheaper fuel.

“If people decide to keep running on petrol, others will migrate to CNG.”

In its latest adjustment of the price, the PPPRA stated that it arrived at the new band after taking into consideration the operating costs by marketers.

“Please recall the provision for the establishment of a monthly price band within which petroleum marketers are expected to sell petrol at the retail stations, based on the existing price regime.

“After a review of the prevailing market fundamentals in the month of June and considering marketers’ realistic operating costs, as much as practicable, we wish to advise a new petrol pump price band of N140.80 N143.80/litre, for the month of July, 2020,” Abdulkadir stated in the circular.

The PPPRA noted that the ex-depot for collection includes the statutory charges of bridging fund, marine transport average, national transport allowance (NTA) and the administrative charge.

Although the agency set a price of N121.50 to N123.50 when the prices of crude oil averaged $35 last month, it is not clear how it arrived at N140.80-N143.80, now that the price hovers around $38 and $40, a higher percentage compared to the price movement in the international market.

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