FG to review fuel price template – Kachikwu

FG to review fuel price template – Kachikwu

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ABUJA—The Federal Government, weekend, said it would undertake a review of the pricing template for Premium Motor Spirit, PMS, also known as petrol, to forestall a further increase in the price of the commodity.

Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, stated this during a grand award ceremony organised by the Petroleum Products Pricing Regulatory Agency, PPPRA, branch of Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN in Abuja.

Meanwhile the Senate Committee on Petroleum (Upstream), has asked the Department of Petroleum Resources, DPR, to henceforth, prepare and forward to it, the daily product records of oil and gas in the country.
Minister of State, Petroleum, Dr. Ibe Kachikwu,
The committee said the record of daily crude oil production must be submitted to the Senate every month. This will include petroleum industry activities, data on seismic activities, crude oil production, liftings, allocations, exports by destination, receipts, gas production, utilization, sales, transmission and exports.

Chairman of the committee, Senator Tayo Alasoadura, who led members of the committee to the headquarters of the Department of Petroleum Resources, DPR, in Lagos on oversight responsibility, said the development would afford the Red Chamber the opportunity to have deeper knowledge of activities of the oil and gas sector in the country.

Alaosoadura, who represents Ondo Central Senatorial District on the platform of the ruling All Progressives Congress, APC, frowned at perceived sidelining of the legislature in the provision of some information on activities by agencies of government, saying the trend must stop.

Speaking on the pending review of pricing template, Kachikwu said it would help cushion the effect of rising foreign exchange rates and the dwindling value of the naira against major international currencies on the price of petrol.

Oil marketers have N30 margin

In early October, Governor of Central Bank of Nigeria, CBN, Mr. Godwin Emefiele, had said in a session with Newspapers Proprietors Association of Nigeria, NPAN, that fuel price would not be adjusted because marketers had been given N30 profit margin per litre.

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He had said: “I am telling you that the price of petrol will not be reviewed based on the arrangement the CBN and the NNPC have put in place to see to it that dollar is available to the importers of petroleum products and I am telling you that. What is that arrangement at this time, all the International Oil companies, IOCs, have been directed, based on the agreement between CBN and NNPC, that they should channel their dollars, oil companies and servicing companies selling their foreign currencies cannot go directly to begin to auction their money. They should channel their dollars through a mechanism created and operated between the CBN and NNPC where dollar is made available to marketers to import petrol.

Foreign exchange template

“At the time this programme started, the marketers were told that they can procure their foreign exchange at no more than N280 to the dollar and their price should not be more than N145 per litre. But in working out the price of N145 per litre, the template provided for nothing less than N30 per litre margin for the marketers. That template is available. By making N30 per litre available, even if the marketer does not find the product at N280, but finds it at N300, N305 or even N310, that marketer will still make profit though at a reduced margin.

“That is the template that is currently in place and I am optimistic that it will work. We will see to it that even the IOCs are not compelled to sell at a fixed rate but they will sell at an average interbank rate of the previous day. So even today, some are selling at N305, N310, N315, the average cannot be more than between N305 and N310. I am saying if a marketer procures foreign exchange at an average of between N305 and N310, he will still make profit by selling at N145 per litre, that is my argument.”

 

 

 

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