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NNPC Threatens Marketers over Fuel Price Hike
  • Crude oil price hits $56 per barrel
    By Mike Oduniyi

    The Nigerian National Petroleum Corporation (NNPC) said it would sanction any oil marketers that sells fuel above the current ceiling set by the Petroleum Products Pricing Regulatory Agency (PPPRA).

    Reports had last week indicated that some marketers had jerked up petrol price to between N70 and N75 per litre allegedly based on an earlier declaration by the PPPRA that prices would always reflect trends in the international market.

    In a statement issued at the weekend and signed by its General Manager, Group Public Affairs, Dr. Levi Ajuonuma, the NNPC said fuel prices had not been increased.

    The NNPC position came just as crude oil prices continued on the upward trend, hitting past $56 per barrel at the close of trading at the weekend.

    According to Ajuonuma, the "fundamentals of products demand and supply at this time in time do not support such a price for petrol."

    These fundamentals, he stated, include intense competition for market share amongst marketers, and abundant supply of products, all of which should have a stabilizing effect on prices.

    "The corporation urges marketers not to sell beyond the price band set by the PPPRA, as offenders will have their stations shut down for a minimum of three months," he added.

    While calling on the public to report any marketers found to have raised fuel price above the approved price band, Ajuonuma said the corporation was sure fuel prices would still hit the downward trend once crude oil price rise rescinds.

    In approving the latest increase in pump prices of fuel, the PPPRA had set an upper ceiling of N55 per litre of petrol. Marketers fixed prices of petrol at mostly N53 per litre up from N43 a litre.

    The price hike led to a four-day nationwide warning strike by the Nigeria Labour Congress (NLC).

    The NLC is currently mobilising resumption of the strike as the government appears not keen on meeting Labour's demand for price reversal.

    PPPRA officials later told THISDAY that given current market trend, upper ceiling for petrol price will be N59.80 a litre, which it will approve for marketers once their imported cargoes arrive the country.

    The approval, according to the agency officials, would be in line with the deregulation policy which allows for cost recovery by industry operators.

    Also speaking to THISDAY on the issue, the Managing Director of Petroleum Projects International (PPI), Mr. Wole Omoboriowo, said while the deregulation policy remains the best for the sector, the Federal Government should ensure full implementation of the proposed palliative measures.

    "Having set up the committee on palliatives, the Federal Government should publicise and implement these cushioning policies so that the citizens can see at a glance government efforts, and hence check the impending NLC strike," he said.

    Rising crude oil prices has been blamed for the increase in pump prices, with the Federal Government saying it was not prepared to subsidy local fuel consumption.

    Oil prices have gone up more than $10 a barrel since September, with the Light sweet crude traded at $56.17 per barrel and the Brent at $51.92 per barrel.

    The high prices were attributed to the continuing worries over supplies of heating stocks in the US, strong demand in China and unrest in Iraq.

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