Indications of federal government increasing the price of premium motor spirit (PMS) to address the problem of scarcity which has lasted for over three months have emerged. The hint was given yesterday by Bauchi State governor, Mohammed Abubakar, while briefing State House reporters after the National Economic Council (NEC) meeting presided over by Vice President Yemi Osinbajo at the presidential villa, Abuja.
He said the decision was taken following a briefing of the Council on the reason why fuel scarcity persists by the group managing director of the Nigeria National Petroleum Corporation (NNPC), Maikanti Baru. According to him, NEC has set up a committee headed by the Gombe State governor, Ibrahim Dakwambo, which will interact with NNPC with a view to determining the correct price for PMS, considering the price of the product in countries bordering Nigeria.
Continuing, the Bauchi governor said, “The second issue that was discussed was the issue of the scarcity of petroleum products. The problem was addressed by the group managing director of the NNPC.“The issue is of course caused by an inter-play of the exchange rate of the Naira and the Dollar and the price of crude oil at the international market which affects the landing cost of refined products in Nigeria.“And in the process, makes the operation of the current price regime almost impossible without some measure of return for whoever is in the process.
“As at today, most, if not all independent marketers have stopped importing refined products into Nigeria; it is only the NNPC that has been doing it. And the NNPC has been suffering a lot of setbacks – the highest amount of under-recovery.“Under-recovery means the inter-play between the landing cost of a litre of the PMS in Nigeria and the pump price of that product. If the product lands at N170, for example, and you sell at N145, immediately you know that you have an under recovery of about N25 for each litre of fuel.
“So he submitted his report and the National Economic Council has a committee that has been interfacing with all revenue generating agencies of the federal government under the chairmanship of the governor of Gombe State.”“That committee has been charged with the responsibility of interfacing with NNPC with a view to determining the correct price for PMS considering the price of the product, especially in countries that are bordering Nigeria because that is one of the reasons that encourage smuggling of the products to these areas,” he added.
