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Tag: PMS

  • FG explains deregulation of oil downstream sector

    FG explains deregulation of oil downstream sector

    The Minister of State for Petroleum Resources Chief Timipre Sylva says the deregulation of the downstream oil sector was to ensure economic growth and development of the country.

    Sylva made this known in a statement in Abuja, on Thursday.

    He said it was unrealistic to continue to subsidise the Premium Motor Spirit (PMS) also known as petrol as it had no economic value.

    He urged Nigerians to ignore recent misguided comments and innuendos on the issue.

    “It has become expedient for the Ministry of Petroleum to explain misconceptions around the issue of Petroleum Products Deregulation.

    “After a thorough examination of the economics of subsidising PMS for domestic consumption, the government concluded that it was unrealistic to continue with the burden of subsidising PMS to the tune of trillions of naira every year.

    “More so, when the subsidy was benefiting in large part the rich rather than the poor and ordinary Nigerians.

    “Deregulation means that the Government will no longer continue to be the main supplier of Petroleum Products, but will encourage private sector to takeover the role of supplying Petroleum Products,” he said.

    According to him, market forces will henceforth determine the price at the pump.

    This, he said was in line with global best practices adding that government would continue to play its traditional role of regulation; to ensure that this strategic commodity was not priced arbitrarily by private sector suppliers.

    “A regulatory function not unlike the role played by the Central Bank of Nigeria in the banking sector; ensuring that commercial banks do not charge arbitrary interest rates.

    “Petroleum Products are refined from Crude Oil. Therefore the price of Crude (the feedstock) for the refining process will affect the price of the refined product,” he added.

    Sylva noted that when Crude Oil prices were down, government, through its regulatory functions ensured that the benefits of lower Crude Oil prices were enjoyed by Nigerians by ensuring that PMS price was lowered.

    He noted that government at that time indicated that increase in Crude Oil prices would also reflect at the pump.

    “This is a necessary action taken by a responsible government in the overall interest of Nigerians.

    “Indeed, one of the reasons we have been unable to attract the level of investments we desire into the refining sector has been the burden of fuel subsidy.

    ” We need to free up that investment space so that what happened in the Banking Sector, Aviation Sector and other Sectors can happen in the Midstream and Downstream Oil Sector.

    ” We can no longer avoid the inevitable and expect the impossible to continue. There was no time government promised to reduce Pump Price and keep it permanently low.

    “Let us therefore ignore the antics of unscrupulous middlemen who would want status quo ante to remain at the expense of the generality of Nigerians.,” he added.

    The minister noted that in addition to attracting investments and creating jobs and opportunities,the policy direction would free up trillions of naira to develop infrastructure instead of enriching a few.

    He said that government was very mindful of the likely impact higher PMS prices would have on Nigerians.

    “To alleviate this, we are working very hard to roll out the auto-gas scheme, which will provide Nigerians with alternative sources of fuel and at a lower cost, ” he said.

  • PPPRA explains ambiguity in deregulation of petrol pump price

    PPPRA explains ambiguity in deregulation of petrol pump price

    The Petroleum Products Pricing Regulatory Agency (PPPRA) says it is no longer fixing the pump price of Premium Motor Spirit (PMS) also known as petrol for marketers.

    PPRA Executive Secretary, Mr Saidu Abdulkadir made this known in a statement in Abuja on Sunday.

    Abdulkadir, however, said the agency would constantly, on a monthly basis, develop a guiding price for the commodity, with which it would advise marketers.

    He noted that the deregulation of the downstream sector was dependent on the enforcement of appropriate laws by strong regulatory agencies, hence its continued intervention.

    “For the purpose of emphasis, let me reiterate that different sectors of the polity operate under the guidance of national regulators.

    “The Central Bank of Nigeria (CBN) regulates the banks and the financial sector; Nigerian Communication Commission (NCC) regulates telecommunications; National Insurance Commission (NAICOM) regulates the insurance sector and the same exists for operators in Nigeria’s downstream petroleum sector.

    “To this end, it is not out of place for the Agency to provide a guiding price band with the aim to protect consumers against price gouging.

    “It is important to also state that there is no where in the world that deregulation means total lack of control, supervision or oversight.

    “While the Market-Based Pricing Regime is a policy introduced to free the market of all encumbrances to investment and growth, it should not be misconstrued to mean a total abdication of government’s responsibility to the sector and citizenry,” he said.

    Abdulkadir said that the PPPRA no longer fix prices, but rather provide a guiding price band by monitoring petroleum products prices daily.

    This, he said was being done using the average price of the previous month to determine prices for the following month, for appropriate cost-reflective pricing that ensures reasonable returns to Oil Marketing Companies (OMCs).

    “This methodology is in line with international best practices which range from bi-monthly to monthly price reviews.

    “Nigeria adopted the monthly review model considering the average duration for the importation of petroleum products into Nigeria from the closest spot market; North West Europe (NWE) to West Africa (WAF) is about 30 days.

    “This period encompasses the Import Financing Process to delivery at retail outlets,” he added

    He further said that the new pricing regime would encourage oil marketers to resume supply of PMS, leading to further value creation in the downstream; foster job creation and ensure reasonable returns for investors.

    According to him, it will create healthy competition among marketers, enhance value for consumers and make funding available for other important infrastructure.

    He said that the PPPRA would continue to regulate the downstream petroleum industry, irrespective of the deregulation of the sector.

    Abdulkadir said this would also prevent petroleum products marketers from exploiting consumers and help to enforce the appropriate laws guiding the industry.

    On code of conduct for oil marketers, he said that although crude oil price and petroleum products prices were positively correlated, the prices of petroleum products do not increase or reduce correspondingly with changes in crude oil price.

    He noted that the pump price will be a reflection of the international market prices of petroleum products that were also rising.

    Abdulkadir further stated that in line with its laws, the PPPRA developed Guidelines for Petroleum Products Commercial Framework and was drawing up Code of Conducts for Operators in the new pricing regime.

    He also added that the PPPRA was finalising the review of cost elements and profit margins on the pricing template for marketers, to reflect the current market-driven pricing regime which was last reviewed in 2016.

  • Petrol price: FG urged to enforce holistic industry reform

    Petrol price: FG urged to enforce holistic industry reform

    A coalition of Civil Society Organisations (CSOs) has called on the Nigerian government to enforce a holistic reform in the country’s oil and gas industry.

    The CSOs, comprising of 13 different organisations working to promote transparency and accountability in the industry made the call in a communique following developments in the sector.

    They observed that the immense fiscal pressure Nigeria is under as a result of low crude oil prices can only be reduced through the urgent implementation of critical reforms.

    Recall that in response to the economic downturn, Nigeria has implemented a few policy measures including the review of the Federal Government 2020 budget Benchmarks and cut of the overall approved appropriation Act by N1.5 trillion, in addition to announcement of fuel subsidy removal.

    Also, on Thursday, the Petroleum Products Pricing Regulatory Agency (PPPRA) announced the removal of the cap on the price of Premium Motor Spirit (PMS) also known as petrol.

    The PPPRA said it would continue to monitor trends in the crude oil market and advise the Nigerian National Petroleum Corporation (NNPC) and oil marketers on monthly guiding price for the commodity.

    However, the organisations which include Nigeria Natural Resource Charter (NNRC), Budgit, Media Initiative for Transparency in Extractive Industries (MITEI), considered these measures to be inadequate, urging the federal government to enforce a holistic industry reform.

    In the communique, they recommended the privatization of the country’s four refineries in their present condition to avoid further revenue losses.

    “We suggest the adoption of a transparent merit-based model for privatization… We encourage the government to adopt favourable fiscal terms that bring about a renewed investors’ confidence and also help fast track the proposed 29+ refineries, which still have valid operating licenses,” the communique reads.

    To clear the present confusion relating to fuel subsidy removal, the group urged the government to lay out defined processes and regulatory guidelines to support the announced removal of fuel subsidy.

    “These should be pushed forward and announced by the Presidency and the Minister of Petroleum Resources to give the policy an official seal of affirmation to all Nigerians that we are not in another false expedition,” the communique reads.

    Recall that the Group Managing Director of the NNPC, Mr. Mele Kyari, had on April 8, 2020 announced an end to fuel subsidy regime. But there has been no clear policy guideline in this direction since the announcement.

    Consequently, to commit to the sustainability of the no-subsidy regime, the CSOs emphasised the need to give the GMD’s policy statement legal backing either through a stand-alone legislation, or through appropriate clauses integrated into the Petroleum Industry Bill (PIB).

    According to the CSOs, there is also the need for the government to transition the PPPRA and the Petroleum Equalisation Fund (PEF) into new roles to ensure the sustainability of the proposed ‘non-subsidy policy’.

    “Repeal of the PPPRA and PEF(M)B Act and transition them into efficient and competent institutions to support the reforms encapsulated in the proposed PIB are possible options to consider,” they stated.

    Furthermore, to guide against exploitation of Nigerians when the downstream sector is fully liberalised, the CSOs urged the government to prepare for a post-price regulation era by prioritizing consumer protection.

    “The interests of the people should not suffer exploitation in the hands of profiteering marketers. We suggest anti-trust or competition propositions using the Federal Competition and Consumer Protection Act 2019,” the CSOs stated.

    With regards to the role of the National Oil Company, the CSOs advised against giving the NNPC any advantage, whether comparative or competitive, over other petroleum products marketers in terms of access to foreign exchange for products importation, to create a level playing field.

    “If the NNPC must remain a player in the market, it must strive to operate under the same conditions and rules as other players in the sector regulated only by the prevailing market forces and competition,” the communique stated, adding that while the industry awaits passage of the PIB, steps should be taken to delineate the roles of policy formulation, regulation and enforcement as well as operation in the Nigerian oil and gas industry.

    Other organisations which signed the communique include Civil Society Legislative Advocacy Centre (CISLAC), Women in Extractives, Connected Development (CODE) and Spaces for Change, amongst others.

  • PPPRA removes price cap on petrol

    PPPRA removes price cap on petrol

    The Petroleum Products Pricing Regulatory Agency (PPPRA) has removed the cap on the price of Premium Motor Spirit (PMS) also known as petrol.

    The agency made the disclosure in a document it released in Abuja on Thursday entitled, ‘’Market Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020’’.

    It said in the document signed by its Executive Secretary, Mr Abdulkadir Saidu, that, henceforth, the price of PMS would be determined by market forces.

    It said that it would continue to monitor trends in the crude oil market and advise the Nigerian National Petroleum Corporation and oil marketers on monthly guiding price for the commodity.

    The agency said that it made the regulations with the approval of the President Muhammadu Buhari.

    “From the commencement of these regulations, a market-based pricing regime for Premium Motor Spirit (PMS) shall take effect.

    “The agency shall monitor market trends and advise the NNPC and oil marketing companies on the monthly guiding Market-Based Price.

    “The price of Premium Motor Spirit (PMS) advised by the agency shall be guiding retail price at which the product shall be sold across the country.

    “The regulations may be cited as the Premium Motor Spirit (PMS) Market Based Pricing Regime Regulations, 2020, made this 20th day of March, 2020,” it said.

    According to the agency, the regulations seek to complement and enforce the provisions of the PPPRA (Establishment) Act, 2003, and to notify the general public of the existence of a market-based pricing regime for PMS with effect from March 2020.

  • Marketers speak on new price of petrol

    The Independent Petroleum Marketers Association of Nigeria (IPMAN), has called on its members to immediately comply with the recent reduction in the price of Premium Motor Spirit (PMS).

    The call followed the recent new price announced by the Petroleum Products Pricing Regulatory Agency (PPPRA), Alhaji Bashir Danmalam, the Chairman of the association in Kano, in a press statement on Tuesday in Kano.

    According to him, all marketers under my jurisdiction should immediately comply with the new price modulation advice by making sure no one sells above the approved ceiling of N123.50 per litre.

    He further assured the public of a steady supply and distribution of petroleum products at all times and in all circumstances.

    Danmalam also commended the Federal Government for the development, and ensuring stable supply and distribution of the product, despite the lockdown occasioned by the COVID-19 pandemic.

    He further prayed to God to bring the end of the challenge, while advising both the public and marketers to continue to observe all public health measures of personal hygiene and social distancing.

    Recently, PPPRA, had announced a slight reduction in the pump price of the PMS in the country. In a memo containing the new price guideline for the month of June, titled ‘A.4/9/017/C.2/IV/70131’, the PPPPRA pegged the petrol pump price band between N121 to N123.50 per litre.

    According to the agency, the ex-depot price band is now N100.13 and N108.13 per litre while ex-depot for collection is N108.78 and N111.78 per litre.

  • IPMAN confirms purchase of PMS at N108 per litre ex-depot price

    IPMAN confirms purchase of PMS at N108 per litre ex-depot price

    The President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr Chinedu Okoronkwo says its members have started buying Premium Motor Spirit (PMS) also known as petrol at N108 ex-depot price as announced by NNPC.

    Okoronkwo, who made this known in an Interview in Abuja, on Sunday, said the new price is only good for those buying in high volumes.

    Recall that the Nigerian National Petroleum Corporation (NNPC) had on May 6, announced a reduction in the ex-depot price of PMS from N113.28k per litre to N108.00K per litre across all its products loading facilities.

    Ex- depot price is the price at which the depot owners sell the commodity to retail outlets across the country.

    Okoronkwo said that the development was welcomed and seen as a partial deregulation of the downstream oil sector.

    “We have started getting the product at the ex depot price of N108 as announced by the NNPC.

    “It is a welcome development but it is not that exciting because it looks more like you will buy products high and sell cheaper.

    “The new price is only good for those buying in high volumes,’’ he told NAN in the interview.

    He noted though that the price of PMS had gone down, adding that if it goes up in the global market, it would also go up in the country.

    According to him, the marketers are currently planning to start importation of petroleum products in the country and that if the sector is properly deregulated, it will help to drive price of the product.

    “When the market opens, marketers will go and buy products and come home and sell,’’ he said

    IPMAN president said that the current development had brought to fore the need to revamp the nation’s refineries to boost local refining capacity.

    He called for investments in construction of modular refineries, urging the Federal Government to ensure that the three major refineries in the country were rehabilitated.

    However, the National President, Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Dr Billy Gillis-Harry said that their members were still buying the product at the old price of N113.

    “First, N108 per litre had been announced by the PPMC as ex-depot price; we have the communication both from the PPMC and the PPPRA. But the reality is that there is no implementation of that as it is today.

    “Our members have been loading from the refineries at the last price which is about N113 per litre.

    “The idea was that they are going to do a credit note back to marketers. Right now, that has not been implemented. The normal thing is to do credit note back to marketers,’’ he said.

    He said that the association was also advised by PPMC on May 7, to send back old forms for the purchase of products

    “You know marketers, what we do is that sometimes we buy up to 10, 20 trucks ahead. Now, those ones have been locked up there, we have not loaded. .

    “Basically, when the forms are returned, they would be regularised to the current N108 or whatever it is. But right now, that has not been done,’’ he said.

    He noted that after the new ex-depot price, the PPPRA had not issued a band at which marketers could sell the pump price.

    “Normally, they give a lower band, say N123 per litre and a higher band, say N125.

    “That has not been done. And in my capacity as the national president of PETROAN, I am reaching out to marketers, our members, to try to reach out to the authorities to be able to know exactly what the scenario is.

    “That is the reality. We today will assume that there is some level of partial deregulation by this process,’’ he said.

    It will be recalled that the PPPRA said it would be releasing monthly petroleum products price modulation that would reflect the global market fundamentals.

    Gillis-Harry also said that marketers in the nearest future might venture into importation.

    “We form highest base of clients for petroleum ex-depot purchases. This is because it is our members that form IPMAN, major marketers, NNPC Retails outlets. If we do not have products from NNPC, we would fall back to DAPPMA members.

    `’If DAPPMA members are not readily available, our members would not starve the public of our essential services.

    “So, the chances of us pulling our resources together to bring in cargo from time to time until a designated time frame for onward distribution to our members directly would not be ruled out.

    “We are already getting to that, we are already talking to consortium of banks, we are talking to foreign partners to be sure that we have the right marketing prices and to be sure that the Nigerian public is not starved at anytime of petroleum products,’’ he said.

    NNPC had been the sole importer of petroleum products in country since 2016.

  • Depot price of PMS remains N133.28 per litre, NNPC insists

    Depot price of PMS remains N133.28 per litre, NNPC insists

    Nigerian National Petroleum Corporation says that the ex-depot price of Premium Motor Spirit (PMS) also known as petrol remains N133.28 per litre.

    Mr Ndu Ughamadu, the NNPC Group Spokesman, disclosed this in an interview with the News Agency of Nigeria(NAN), in Abuja on Tuesday.

    He said that Nigerians should ignore any specualtions that pump price will soon increase.

    “The ex-depot price of PMS remains N133.28 per litre as at today and this is according to the Petroleum Products Pricing Regulatory Agency (PPPRA) template.

    “NNPC remains the sole importer of the product and we have not increased the price we sell to marketer.

    “There is no plan to increase pump price, Nigerians should know that,” he said.

    He said that the corporation had robust stock pile of products that would last the country for several days, adding that there was no need to engage in panic buying.

    He said that the corporation over the weekend had strengthen the partnership with Major Oil Marketer Association of Nigeria (MOMAN) to ensure adequate supply of products in the country.

    “We also told them not to increase price but if they engage in that, it is illegal and we have instructed the Department of Petroleum Resources (DPR) to sanction them.
    Members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) had recently warned that the pump price of the PMS may sell above N145.

    The IPMAN Chairman of Ore Depot, Mr Shina Amoo, who gave this hint, added that the price of the product has increased at the private depot.

    According to him, the private depot owners now sell the product between N136.50 and N137 per litre instead of the former N133.28 per litre approved by the NNPC.

    “IPMAN may soon start selling beyond N145 per litre if depot owners continued to sell between N136.50 and N137 per litre,” he said

  • N800bn ‘fuel subsidy’ drags down govt’ revenue

    N800bn ‘fuel subsidy’ drags down govt’ revenue

    The Nigerian National Petroleum Corporation (NNPC) at the moment spends N53 under-recovery in terms of petroleum products pricing for every litre of Premium Motor Spirit (PMS) consumed by Nigerians.
    TheNewsGuru (TNG) reports Director of Budget in the Ministry of Budget and National Planning, Ben Akabueze made this known while fielding questions from participants at the Strategic Dialogue on the Morocco-Nigeria Relations in Abuja on Wednesday.
    According to estimates available at the petroleum regulatory agency of Nigeria, the Department of Petroleum Resources, Nigerians consume 45 million litres of PMS, otherwise known as petrol, on a daily basis. This translates to mean that the NNPC records about N2.38 billion as under-recovery daily, and over N800 billion on a year basis.
    According to the National Bureau of Statistics’s (NBS) PMS price watch for September 2018, average price paid by consumers for premium motor spirit (petrol) across states in Nigeria is N147.3, meaning Nigerians were supposed to be paying over N200 for fuel per litre if it were not for the ‘subsidy’, now branded as under-recovery.
    According to Akabueze, at the Strategic Dialogue on the Morocco-Nigeria Relations in Abuja, the huge amount being paid by the NNPC has grave financial implications for the country by dragging down the country’s revenue.
    “At the moment, in terms of pricing of petroleum products, for every litre of petrol, there is a N53 under-recovery. Well, that is the term that the NNPC, which has this responsibility, calls it and so who am I?
    “On oil price, it is a double-edged sword unfortunately. This ought to be a season where we should be clicking glasses with regards to the oil price. But right now, practically every drop of refined petroleum product that we consume in the country is imported.
    “And the one single factor that determines the price of refined product is the price of crude. In essence, while we export the crude at about $80 (per barrel), we effectively import back the same crude at about $100 importation price for refined products.
    “That explains why despite the strong oil prices, we are not seeing a corresponding growth in government revenue,” he stated.
    Akabueze further stated that building new refineries may not be the answer but getting the old ones to work and meet demands.
    He said that is why the government is working to opening up private individuals/investments for refinery ownership and operations.
     

  • Nigerians paid more PMS in September – NBS

    Nigerians paid more PMS in September – NBS

    The National Bureau of Statistics (NBS) said the price paid by consumers for Premium Motor Spirit (Petrol) increased to N147.30 in September from N146.90 recorded in August.
     
    The NBS disclosed this in its Premium Motor Spirit (Petrol) Price Watch report for September 2018 on Monday in Abuja.
     
    According to the bureau, the price of petrol increased by 1.9 per cent year-on-year and 0.3 per cent month-on-month.
     
    It said states with the highest average price of petrol were Enugu (N153.88), Taraba (N152.86) and Delta (N150.92).
     
    It also named states with the lowest average price of petrol to include Kano (N144.87), Katsina N143.63) and Bauchi (N144.00).
     
     
    Meanwhile, the NBS said the price of Automotive Gas Oil (Diesel) increased from N207.98 recorded in August to N211.64 in September.
     
    According to the bureau, the price of diesel increased by 1.76 per cent month-on-month and 14.52 per cent year-on-year.
     
    It said “states with the highest average price of diesel are Borno (N245.83), Taraba (N235.00) and Sokoto (N228.33).
     
    “Similarly, states with the lowest average price of diesel are Edo (N197.28), Katsina (N195.63) and Rivers (N190).

  • PMS scarcity: Sell at N145 or lose your petrol, DPR warns marketers in Anambra

    PMS scarcity: Sell at N145 or lose your petrol, DPR warns marketers in Anambra

    The Department of Petroleum Resources (DPR) has warned marketers within its Enugu Zone to comply with N145 pump price of Premium Motor Spirit (PMS) or have their products dispensed to customers free.

    Mr Unyime Akpan of Health, Safety and Environment Department, DPR Enugu Office, gave the warning in Awka when he led an enforcement team to Anambra on Tuesday.

    Akpan said the team sealed one filing station for allegedly refusing to revert and enforced the pump price sale of the product in nine other stations on Atani road in Ogbaru and some parts of Idemili North Local Government Areas.

    He expressed regret that some marketers had remained defiant, in spite of DPR’s efforts to ensure compliance, noting that the DPR might apply more stringent punishment by dispensing products of defaulting marketers to customers for free.

    “Petrol price is controlled; stations are not supposed to sell above N145 per liter and if the cost of getting products suggests they cannot sell at that price, then they should leave out.

    “Marketers are the people encouraging the hike; if they are not gaining from it, then they leave out until the system returns to normal.

    “We may have to begin to dispense their products free because DPR also has the powers; if this price compliance sales proves ineffective, we may be left with no option than to give out their petrol, so that they can understand how serious we are,” he said.

    In a reaction, the Independent Petroleum Marketers Association of Nigeria (IPMAN) absolved its members of any complicity in the hike of petrol price and blamed it on scarcity.

    Chief Ikechukwu Nwankwo, Chairman of IPMAN, Enugu Depot, in charge of Anambra, Ebonyi and Enugu states, urged DPR to stop the clampdown the members as sealing outlets and auctioning the products would not solve the problem.

    Nwankwo decried the petrol supply situation in the country and called for a more sustainable measure to normalise it.

    He said DPR’s action on IPMAN members, especially those under his zone, amounted to being punished for a problem they did not cause and could not solve.

    Nwankwo said that solution to the problem was massive and sufficient supply of petrol into the system by the NNPC.

    The IPMAN chairman said marketers were making efforts to make the product available to customers as complete scarcity would amount to shutting the economy and holding the masses hostage.

    “I have spoken with my members here in Anambra, the situation of fuel supply is bad and it is our wish that we begin to get products like the way it used to be before.

    “IPMAN is not happy with the way the DPR is harassing us, closing our stations and auctioning our products. It is like they want to push us out of business because we cannot continue to suffer this loss.

    “NNPC is not allocating products to us, DPR should go and monitor the marketers that get allocation from NNPC; how can we buy product at N190 or N195 and DPR sells them off at N145.

    “We make extra effort to get product at tank depot so that economic activities can go on and we should not be punished for that; we may have to close our stations if they continue to pursue us,” he said.

    TheNewsGuru reports that pump price of petrol has dropped from between N240 and N250 to N200 per liter.