…says subsidy down to ₦4.52 per litre
The Federal Government
has commenced a downward review of the current petroleum products price
template, with a view to eliminating inefficiencies in the price regime. The Group General
Manager, GGM, of the Nigerian National Petroleum Corporation, NNPC, Mr. Bello
Rabiu disclosed this at interactive session with journalists in Abuja,
yesterday.
Vanguard report continues:
According
to him, the current administration was convinced that petroleum products were
overpriced, in Nigeria at the moment, and that with the elimination of
inefficiencies, prices of products would go below current pump prices.
His
words, “Our review of the current PPPRA (Petroleum Products Pricing Regulatory
Agency) template suggests that there are significant inefficiencies in the
current template. It is important that changes in the template are based upon a
proper evaluation of the costs of the different elements.
“A
comprehensive study of the costs of importation is being undertaken. We will be
consulting with all relevant stakeholders including the marketing companies and
independent experts in order to produce an adjusted template.
“If
oil prices continue to fall and if significant inefficiencies are found and
eliminated within the template, there will surely be negative subsidy which
shall be remitted to the Petroleum Support Fund in line with the PPPRA
guidelines.”
The
GGM added that as being anticipated, an adjusted template would lead to less
cost of products which would make provisions for subsidy unnecessary in next
year’s appropriation, saying, “We don’t see the need for subsidy to be in the
budget in 2016”.
Mr.
Rabiu disclosed that, as at Thursday, December 17, 2015, there was only a ₦4.52
subsidy per litre. The details are: Cost and Freight ₦65.48;
Logistics (Trader’s Margin, Lightening Expenses, NPA, Financing, Jetty –Depot
thru put, storage) ₦10.55; Distribution Margin (Retail, Transportation, Dealers,
Bridging Fund, Administration) ₦15.49, bringing the Open Market Price to ₦91.52
per litre.
The
GGM said that the NNPC did not believe that consumption of petrol was as high
as 50 -55 million litres per day as the PPPRA claimed.
Rather,
he said that the organization believed that consumption was around 40 million
litres per day, using the statistics from its field monitors.
“Government
should pay (subsidy) for what Nigerians consume and the people should pay for
what they consume, not for what they did not consume,” he said.
According
to Mr. Rabiu, the new template would become effective in the first quarter of
2016.
Speaking
on the current fuel queues, the Managing Director of the Products and Pipelines
Marketing company, PPMC, Mrs. Esther Nnamdi-Ogbue said that the normalcy would
be restored in a few days as Kaduna was already receiving crude and would commence
production from tomorrow.
She said that the
development was meant a lot to the fuel distribution arrangement as the new
pipelines security arrangement was beginning to yield desired results.
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