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NNPC debunks rumors of petrol price hike, warns against hoarding

06 Apr 2017, 11:36 am
Financial Nigeria
NNPC debunks rumors of petrol price hike, warns against hoarding

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NNPC said the government has no plans to hike pump prices above N145 per litre, notwithstanding the increase in transporters' allowances.

Nigerian National Petroleum Corporation headquarters, Abuja

The Nigerian National Petroleum Corporation has announced that the recent increase in bridging allowance to transporters will not result in an increase in pump prices of petrol.

On Monday, Maikanti Baru, NNPC’s Group Managing Director, had announced a review of the bridging allowance from N6.20 per litre to N7.20 per litre as part of an agreement with striking members of the National Union of Petroleum and Natural Gas Workers (NUPENG).

But speaking in Abuja on Wednesday, Henry Ikem Obih, NNPC’s Chief Operating Officer, Downstream operations, said the government has no plans to hike pump prices above N145 per litre, notwithstanding the increase in transporters' allowances. Obih said the NNPC achieved the revised bridging cost by reducing “lightering expenses” from N4 per litre to N3 per litre under the petroleum products pricing template. The difference was then transferred to compensate for the increased cost of bridging within the same template.

“What happened, in simple language, is a rebalancing of the margins allowed and approved for stakeholders,” Obih said. “So what the Petroleum Products Pricing Regulatory Agency did was to take N1 from lightering expenses and add same to the bridging allowance. That is how we arrived at N7.20. Therefore, PMS remains at the ceiling of N145 per litre.”

The bridging allowance refers to the cost element built into the products pricing template to ensure a uniform price of petrol across the country. Lightering expenses, on the other hand, are charges incurred for moving products from mother vessels to depot area via light vessels owing to the inability of large ships to berth in shallow water depths.

On the availability of petroleum products, Obih said the country has 1.3 billion litres of petrol in stock, translating to an inventory of 36 days. Obih also said NNPC’s products stock is further bolstered by the recent production of petrol by the company’s refineries located in Port Harcourt, Warri and Kaduna.

“There is absolutely no risk of shortage in supply as we also continue to import to support the production from the refineries. We have informed the Department of Petroleum Resources to enforce the prevailing N145 per litre price regime and also ensure that every service station that has fuel is selling to the public,’’ Obih said.


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