Mele Kyari, GMD NNPCL
By Jon Egie
* Forex will determine PMS pump price
* Pump price expected to fall as NG forex firms
Since May 31, when the policy on Premium Motor Spirit, PMS, subsidy removal was implemented, the federal government has saved N400billion.
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Managing Director and Chief Executive of Nigeria National Petroleum Company Limited, NNPCL, Mele Kyari was quoted to have disclosed this during a recent meeting with industry stakeholders.
At the meeting, Kyari had said as at the time of the meeting, by law and provisions of the Appropriation Act, there was a subsidy on the supply of petroleum products, particularly Premium Motor Spirit, PMS, into the country.
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“In current data terms, three days ago, the landing cost was around N315/litre.
“Our customers are here; we are transferring to each of them N113/litre. That means there is a difference of close to N202 for every little we import to this country.
“In computation, N202 multiplied by 66.5million litre daily consumption for 30 days, you get over N400billion of subsidy every month.” Kyari said.
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However, oil dealers are speculating a rise in pump price of pms this new month of July, following the floating of the Nigeria Naira against the US Dollar.
The Central Bank of Nigeria, CBN unified the country’s exchange rates into investors and exporters windows in June 14, allowing market forces to determine exchange rate.
Independent Petroleum Marketers Association of Nigeria, IPMAN President, Elder Chinedu Okonkwo said oil dealers in reaction to the floating naira were meeting to respond appropriately.
He said the oil dealers were meeting especially those interested in commencing import of PMS.
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“We are holding meetings with a lot of people who are interested in commencing PMS imports. He said, adding that they were not resting on their oars.
He admitted that there would be a relative rise in petro price in response to forex rates predicting that the removal of subsidy would only lead to a continuous increase of PMS cost.
“Where there is deregulation and no subsidy, the price of petrol would either go up or come down. If you want to profiteer, those who bring in and sell at cheaper rates would put you out of business.
“So the market fundamentals will determine the pricing and capping. Therefore the floating of the naira at this time that Nigeria is beginning to make savings is not going to be a fixed thing,” he stated.
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“The exchange rate will also move up or down depending on how we manage our crude oil, which is our foreign exchange earner. By the time we begin to meet our OPEC quota and other areas of generating foreign exchange, the naira will begin to firm up.
“And this will result in cheaper fuel. So we should not be thinking that the cost of fuel will continue to rise. The floating of the naira is good because at the previous level, you only access the dollar at the official rate based on who you know.”
Credit: PUNCH
