Oil marketers announced on Monday that there is no intention to increase the price of Premium Motor Spirit, also known as petrol, because the Nigerian National Petroleum Company Limited (NNPCL), the commodity’s exclusive importer, can absorb under-recovery.
Under the auspices of the Independent Petroleum Marketers Association of Nigeria, dealers clarified that because the NNPCL was involved in the sales of crude oil, it was entitled to tolerate under-recovery on fuel prices.
They pointed out that because they were unable to absorb such under-recovery, other marketers in the downstream oil sector ceased importing petrol.
IPMAN then urged the public not to worry over the cost of PMS as NNPCL has capacity to manage fuel price.
Under-recovery is a term used in the petroleum sector to denote the notional losses that oil companies incur due to the difference between the subsidised price at which the oil marketing companies sell certain products and the price which they should have received to meet their cost of production.
NNPCL has also repeatedly stated that fuel subsidy is gone and that petrol is a deregulated product, as it also assured Nigerians that there is no plan to hike the cost of PMS.
Some Nigerians had expressed fear following the revelation by oil marketers last week that the cost of petrol should be around N1,200/litre if it was not being subsidised, considering the cost of the commodity in other climes.
But the NNPCL insisted that there was no more subsidy on the product, stressing that it was now recovering its full cost on the importation of PMS into Nigeria.
Commenting on the development in a statement issued on Monday, the National Public Relations Officer, IPMAN, Chief Ukadike Chinedu, said, “The attention of the National Executive Committee of IPMAN, led by Alhaji Debo Ahmed, has been drawn to the current issues relating to misinformation from some news media that IPMAN is speculating of a likely increase in the pump price of PMS.
“We were merely sharing our opinion with the populace on the need for the government to quicken the rehabilitation of the nation’s four refineries to lessen the pressure on the importation of petroleum products into the country.
“NNPC remains the sole importer of PMS despite the full deregulation of the product because they are capable of under-recovery from sales of crude oil which is not possible for other operators in the downstream sector.”
The oil marketers added, “We therefore appeal to the general public to shun panic buying as NNPC have the capacity to manage the price of PMS and have assured us of enough quantity in the system.
“We remain partners in the renewed hope agenda of the present administration.”
