Stakeholders in the business of the marketing of petrol have explained why the N5 reduction ordered by the Federal Government on Tuesday, December 8 has not been effected in many filling stations nationwide. Marketers have cited the reason for this to be poor preparation on the part of the government before the announcement and lack of communication between the government and marketers.
According to them, it is meanspirited of the government and the Labour Congress to make the announcement before consulting marketers and laying proper groundwork for implementation. New National Star spoke to a top oil marketer who said, “Marketers are businessmen who cannot operate at a loss. It is not intelligent or wise to tell them to throw away their money. The FG announced that the price was going to go down in one week’s time, which made nobody buy fuel, neither the customers nor the stations.”
On Tuesday, December 8, Chris Ngige, Minister of Labour and Employment, after a meeting with the Nigeria Labour Congress (NLC) leaders told journalists that the federal government was going to reduce the pump price of PMS by N5 which was going to become effective from Monday, December 14, about a week later. He said, “Our discussions was fruitful and the Nigerian National Petroleum Corporation which is the major importer and marketer of petroleum products and customers have agreed that there will be a slide down of pump prices of PMS and that the price cut will get us about N5 per litre and that the price cut will take effect from next Monday, a week today.” The next day, major news outlets reported that marketers kicked against the statement of the labour minister citing that it was unrealistic to expect a price reduction in one week given the market realities.
The Petroleum Products Marketing Company (PPMC), a subsidiary of the NNPC, has changed the ex-depot prices of petrol several times this year. In March 2020, President Muhammadu Buhari approved the retail pump price of PMS to be sold at N125 per litre, a N20 reduction from the former price of N145. This was effected by marketers with alacrity. In May, the Petroleum Products Pricing Regulatory Agency (PPPRA) announced the new price band per litre of between N121.50 and N123.50. The PPPRA in July announced yet another price change, stating that the PMS price band will be between N140.80 and N143.80 per litre.
The PMS per litre pump price rose again in August from N148 to N150, while the PPMC also disclosed that in September, fuel was going to be sold for N151.56 due to deregulation and market realities. In November, the NNPC hiked ex-depot prices resulting in the PMS pump prices settling at the price range of N168 to N170 per litre. Our source also revealed that oil marketers have yet to receive fuel at the new price announced by the FG, stating that for the pump price reduction to be implemented it had to start from the NNPC adjusting their ex-depot prices which will naturally affect the prices at filling stations retail points.
“When they (oil marketers) have not received fuel at that new price, so everybody still has to buy at that old price. When the fuel in the tank finishes then NNPC can start supplying at a cheaper price and then retailers can start selling that and customers can start buying at that rate,” our source said.
“The problem is that the FG started by announcing it was going to reduce the price in one week, anybody in the market knows that is not a smart thing to do. It’s like telling customers about Black Friday, if you want to buy something, will you buy it the week before Black Friday? So if everybody understands this rule, why do the FG and Labour Congress not understand this?” It was observed last week that some Nigerian National Petroleum Corporation (NNPC) retail stations in Abuja sold PMS at N162.44 per litre. Also, by Saturday, more filling stations in Abuja started adjusting their pump prices reflect the N5 per litre reduction.
When this newspaper tried to contact the NNPC on whether the N5 reduction has been implemented at their end, they declined speaking, deferring instead to the PPPRA, stating that it was better suited to answer that. Our source also explained that the government and labour leaders were using marketers as scapegoats for a plan poorly executed.