Buhari rejects marketers’ demand to increase fuel price

Why fuel price must be increased
– Marketers

President Muhammadu Buhari has reportedly rejected subtle move by marketers to increase fuel price.

The Nation reports that Buhari has also said no to the return of fuel subsidy.

“The key issue is a price war. The marketers have made representation to the Federal Government and the Minister of State for Petroleum Resources, Ibe Kachikwu, to allow price hike of petroleum products and leave the sector to market forces.

“The President and Senior Government Officials are, however, opposed to price hike because of its spiral effect on the socio-economic life of the nation. It also has grave political implications for the survival of the present government.

“In the last few months, the government has been trying to cope through the Nigerian National Petroleum Corporation (NNPC) until there was stress in the supply chain following threats by PENGASSAN and the challenge in Lagos,” a source stated.

A Minister, also unnamed by The Nation, said: “Before the crisis, the nation used to consume between 30 million to 35 million litres of Premium Motor Spirit (PMS) daily but since this current challenge started, the consumption has shot up to 80 million litres per day.

“Without a soothsayer, it is obvious that something had gone wrong. We cannot just rule out sabotage including diversion of products.”

Meanwhile the Private oil marketers have given reasons the pump price of Premium Motor Spirit, PMS, also known as petrol, must be increased.

The marketers are also calling on the government to intervene to enable them access foreign exchange at a special rate for the importation of petrol.

They said selling the product at N145 per litre is no longer feasible with the current exchange rate.

Private marketers said the shortage of foreign exchange and increase in crude prices, have made it unprofitable to import petrol and sell same at N145 per litre.

The National Operations Controller, Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, told reporters, “The problem is that the importation (of petrol) is being handled almost 100 per cent by the Nigerian National Petroleum Corporation as private importers have backed out because the increase in crude price has made the landing cost enter subsidy.

“When the crude price hit $59 per barrel, we could not sell petrol again at N145 per litre if we were importing on our own.

“It is only the government (NNPC) that is importing and can warehouse the subsidy.”

He said the Central Bank of Nigeria, CBN, should have intervened by providing foreign exchange at a special rate solely for the PMS importation for both the NNPC and private importers.

He added, “Right now, the landing cost of the PMS is N154. If you are importing at N305 to the dollar, by the time you add bank charges, it comes to N307 to the dollar.

“If you apply that to the current crude price, the landing cost is N154- N155. By the time you add all the margins, the pump price is about N160- N167.

“Before private importers can resume importation, the exchange rate to a dollar must be N250 and we can sell at the price of N145 per litre.”