Nigeria reduces fuel pump price by 17.9%

Nigerians will be buying fuel at cheaper rates, again. The Nigerian National Petroleum Corporation or NNPC has announced a 17.94 per cent reduction in the ‘ex-depot’ price of petrol.

Petrol Pump Nozzle
Source : Punch Newspapers Nigeria

The price was reduced from N113.28k per litre petrol was sold to marketers in the previous month to about N108.00K per litre.

The new ex-depot price is coming almost a week into the new month, following the promise last month by the Group Managing Director of the NNPC, Mele Kyari, that a new pricing template for petroleum products would be released every first of a new month.

Ex-depot price is the ceiling price at which petroleum products depot owners or terminal operators are expected to sell to marketers. The marketers, through their various filling stations, then sell to the end users. With the reduction of the ex-depot price, a new retail price of petrol is expected to be announced by the appropriate agency, PPPRA.

The Petroleum Products Pricing Regulatory Agency or PPPRA is responsible for price modulation and regulation, is expected to unveil a new fuel pricing template across the country for the month.

This review is expected to further bring down the retail pump price at NNPC filling stations in line with the new spirit of competition among marketers under the recent partial deregulation policy announced by the NNPC GMD for the country’s downstream sector.

At the previous ex-depot price of N113.28 per litre, the PPPRA announced the current fuel price band of N125 per litre (Upper limit) and N123.50 per litre (Lower limit) within which the marketers could sell their products.

The spokesperson of the NNPC, Kennie Obateru, quoted the Managing Director of the Petroleum Products Marketing Company (PPMC), Musa Lawan, as saying the new ex-depot price reflects the company’s market strategy to make more sales.

Lawan said that the NNPC, which is in charge of many mega filling stations operating in some state capitals across the country, will still comply with a new pump price approved by the PPPRA.

The pump price is the amount the consumers of petroleum products pay at the fuel stations or retail outlets across the country.

The PPMC chief explained that the new price regime would enable PPMC to boost its sales volumes from the billions of litres of petrol in its storage, while providing affordable products to millions of customers.

He said the new price was arrived at after extensive review of market realities by the PPMC’s internal price review unit.

He, however, explained that the price of diesel, which was fully deregulated years ago, will still be determined by market forces.