There are indications that the Nigerian government may likely effect a further reduction in the price of Premium Motor Spirit, also known as petrol, following the continuous decline in the crude oil prices in the international market.
Farouk Ahmed, outgoing Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA) signaled the possible downward review of fuel pump price on Thursday while handing over to his immediate successor. Ahmed disclosed that the process of the review of the pricing template would likely commence by March 15.
He said the decision on the review of the price of PMS would be taken next month by Ibe Kachikwu, the Minister of State for Petroleum Resources, after due consultations with stakeholders and based on the price of crude oil in the international market.
“Yes, wait till March, you will see because the minister is fair in the decision he will take; because he will take the decision pragmatically,” Ahmed responded, when asked of a likely reduction in the price of PMS.
Ahmed, one of the heads of agencies sacked on Monday by President Buhari, said the committee to undertake the review would consist of all the stakeholders in the segment of the petroleum industry – including major and independent oil marketers and also depot owners.
Officially handing over to the most senior officer of the PPPRA, Moses Mbaba in Abuja, Ahmed also disclosed that the country has saved about N2.6 billion as at February 3, just about one month after it reviewed the pricing template of petrol.
Speaking on the current state of over-recovery, Ahmed further disclosed that the PPPRA is recovering some money from the Nigerian National Petroleum Corporation (NNPC) and oil marketers.
As at February 16, 2016 for instance, the country recorded over-recovery of N13.81 per litre, which means that the landing cost of PMS is lower than the selling price by N13.81.
But at the close of business yesterday, the over-recovery recorded by the country had dropped to N11.74 per litre. Ahmed said in instances of over-recovery, the PPPRA sends notes to every marketer that falls within that bracket to refund the excess money to the government.
The fund is kept in an account that was recently opened at the Central Bank of Nigeria, CBN, he explained.
“There has been an account launched at the CBN managed by the Accountant-General of the Federation (AGF) where the over recovery funds are deposited into. So there is no question of where the money goes to.
“As at February 3, 2016, the estimate in that account, because we are verifying based on what was imported, is just a small amount of about N2.6 billion. But this is just the beginning because some of them are just arriving in December that is why the subsidy over recovery is low.”
ONYINYE NWACHUKWU
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