The forum of former Group Managing Directors of the Nigerian National Petroleum Corporation, NNPC, on Sunday called for the price increase by calling for a removal of price cap in the pricing template.
A removal of the price cap would mean that marketers would be free to sell petrol at their desired price, based on several factors such as the exchange rate and international crude price. With the Naira exchange rate going down by over 50 per cent to about N412 since the current petrol price was fixed, approving the recommendation would have meant Nigerians pay more for petrol.
The Nigerian government through the Petroleum Products Pricing Regulatory Agency, PPPRA, however, said on Monday that it will not accept the advice.
The former GMDs had in a 12-point communiqué at the end their meeting with the incumbent GMD of the NNPC, Maikanti Baru, said the price cap of N145 per litre of petrol was “not congruent with the liberalization policy.”
The removal of the cap under a liberalised market environment would allow marketers of petroleum products to sell products at any price to enable them recover cost.
The Forum said the current ceiling price of N145 per litre did not factor the current foreign exchange (FOREX) rate and other price components of the pricing template, like crude oil cost and Nigerian Ports Authority (NPA) charges, which remain uncapped.
While stating the government’s response, the acting Executive Secretary of PPPRA, Sotonye Iyoyo, said the proposal was the personal opinion of the former state oil chiefs.
“If it was a recommendation, that is what it is a personal opinion. I’m not aware government is planning any fuel price increase. We are in a liberalised market already,” she told Premiums Times.