Strong indications emerged last night that there might be further price hike in the pump price of petrol despite the current increase in fuel pump price to N855.
The imminent increase, New Telegraph learnt, might soon take effect within the next three months, according to sources. However, more facts emerged yesterday on why the Nigerian National Petroleum Company Limited (NNPC Ltd) was cleared as the sole off-taker in Nigeria of fuel produced by Dangote Refinery and Petrochemicals.
Sources confirmed to New Telegraph that marketers insisted that they could get imported PMS less than the N1000 per litre, which Dangote is proposing to sell to NNPC Ltd. Some marketers that spoke with New Telegraph said if the price of Dangote fuel is higher than imported one, they would import and not buy from Dangote refinery.
The sources added that NNPC Ltd would, therefore, off-take the fuel so that the Federal Government would midwife an arrangement for the payment of the balance of the cost of production and the actual amount to be sold to ensure that Nigerians are not unduly burdened with astronomical pump prices.
By implication, this means that fuel is still being subsidized, necessitating another imminent hike. They further said the current increase in fuel pump price to N855 and above may not be the last as it would further be increased in a short time possibly to about N1,000.
According to them, the government decided not to increase the price at the fell swoop to avoid further shocks in the economy and more hardship on the buyers.
Recall that this newspaper had in June 29, 2024 broken the story that NNPC Ltd would be the sole buyer in Nigeria of fuel from Dangote refinery.
Publisher, Africa Oil+Gas Report, Mr. Toyin Akinosho, had told New Telegraph that Dangote may not sell directly to major oil marketers and Independent Petroleum Marketers Association of Nigeria (IPMAN) but directly to NNPC Ltd.
He stated that given the current crude oil price at the international market and the weak value of the naira to the dollar, the cost of fuel may be between N1,300 and N1,400. He stated that Dangote refinery would sell to NNPC Ltd, and that the latter would now sell to the public at a subsided price of about N600.
Akinosho added that NNPC Ltd in collaboration with the Federal Government would find a way to balance the shortfall. He said: “If I have ever seen any amount anywhere that is less than $1 equivalent, I will mention it. I will say, how about this place where they are selling below $1 equivalent.
But there is no such place. Anywhere I know that there is any little cost that is lower, it is always clear that the government is spending a lot of money to keep it low. “It is not up to whoever is producing PMS.
That is the truth. So Dangote himself cannot bring down the price of PMS. The level that the people are talking about may not be realistic. “In Egypt, the cost of PMS per litre is still higher than $1 and that is where the Egyptian Government tries as much as possible to keep it low.
Whether in Cuba, it is not less. In Venezuela, they tried a lot to keep it arbitrarily low, but it is not anywhere lower than $1. “The cost of fuel, which is a product of crude oil distillation, is tied to the cost of the crude oil.
Now product prices are in the excess of $80 and you cannot have less than $1. In the US, it is over $2, but let us factor in that it is an extreme market economy. In Europe, it is over such a number.”