USA Africa Dialogue Series - Re: STAR STATEMENT: On the Current Fuel Situation - by Minister of State Kachikwu

 This is a most welcome decision by the Buhari administration. I never thought I would see a day when a Nigerian government would remove itself in the smooth running of the economy. The only part of this decision that is a bit bothersome is the fixing of the price of a liter of petroleum. I hope this would be lifted in a few months. There is really no reason to tell anyone how much he can sell his material.

This decision will now make it easy to get rid of those albatrosses called Refineries since they no longer will constitute a cog in the wheel of our national development. Whoever wants to have them should have them, if only to use as scrap.

We only pray that for so long as PMB is at it, let him also look at getting rid of PHCN, that misnomer that stands in the way of Nigerians of having electricity.

And please sir, do not think of resuscitating, Ajaokuta, Nigerian Airways, Nagerian National Shipping Line etc. and all those ridiculous edifices that constitute a drag on our way to economic progress. Beside sucking our collective wealth, they constitute areas of great corruption which you have vowed to fight. 

Thank you sir, And May God bless you

FAKINLEDE   

On Wednesday, May 11, 2016 at 7:51:08 PM UTC+1, Bolaji Aluko wrote:

May 11, 2016

PRESS STATEMENT ON CURRENT FUEL SITUATION

We have just finished a meeting of various stakeholders presided over by His Excellency, the Vice President of the Federal Republic of Nigeria.

The meeting had in attendance the Leadership of the Senate, House of Representatives, Governors Forum, and Labour Unions (NLC, TUC, NUPENG, and PENGASSAN).

The meeting reviewed:

1. The current fuel scarcity and supply difficulties in the country.

2. The exorbitant prices being paid by Nigerians for the product. These prices range on the average from N150 to N250 per litre currently.

3. The meeting also noted that the main reason for the current problem is the inability of importers of petroleum products to source foreign exchange at the official rate due to the massive decline of foreign exchange earnings of the federal government. As a result, private marketers have been unable to meet their approximate 50% portion of total national supply of PMS.

Following a detailed presentation by the Honorable Minister of State for Petroleum Resources, it has now become obvious that the only option and course of action now open to the government is to take the following decisions:

1. In order to increase and stabilise the supply of the product, any Nigerian entity is now free to import the product, subject to existing quality specifications and other guidelines issued by Regulatory Agencies.

2. All Oil Marketers will be allowed to import PMS on the basis of FOREX procured from secondary sources and accordingly PPPRA template will reflect this in the pricing of the product.

Pursuant to this, PPPRA has informed me that it will be announcing a new price band effective today, 11th May, 2016 and that the new price for PMS will not be above N145 per litre.

We expect that this new policy will lead to improved supply and competition and eventually drive down pump prices, as we have experienced with diesel. In addition, this will also lead to increased product availability and encourage investments in refineries and other parts of the downstream sector. It will also prevent diversion of petroleum products and set a stable environment for the downstream sector in Nigeria.

We share the pains of Nigerians but, as we have constantly said, the inherited difficulties of the past and the challenges of the current times imply that we must take difficult decisions on these sorts of critical national issues. Along with this decision, the federal government has in the 2016 budget made an unprecedented social protection provision to cushion the current challenges.

We believe in the long term, that improved supply and competition will drive down prices.

The DPR and PPPRA have been mandated to ensure strict regulatory compliance including dealing decisively with anyone involved in hoarding petroleum products.

Thank you.
SIGNED

HONOURABLE MINISTER OF STATE FOR PETROLEUM RESOURCES

____________________________________________

Aluko Commentary

Good move, especially in full consultation with the stakeholders who clearly could have otherwise misjudged government intentions. 

But it is still not a free-for-all: first, forex will still have be sought from secondary sources (not CBN), and secondly, a band of fuel prices (N138-145, see below) has been mandated.

The last has not been heard on this matter......the race is for increase in internal production rather than importing fuel.....

Bolaji Aluko

http://pppra.gov.ng/pricing-template-pms-2/

Pricing Template – PMS

Posted on May 11, 2016 by pppra in Pricing Templates // 0 Comments

PPPRA PRODUCT PRICING TEMPLATE (PMS)
Based on 30 Days Moving Average Platts Posted Price for:
10th April – 10th May, 2016
						PMS
						Naira/Litre
A	Cost Elements:
1	C+F					109.01
2	Lightering Expenses					4.56
3	NPA					0.84
4	NIMASA Charge					0.22
5	Financing					2.51
6	Jetty Thru' Put Charge					0.60
7	Storage Charge					2.00
8	Landing Cost					119.74
B	Distribution Margins:
1	Retailers					6.00
2	Transporters Allowance (NTA)					3.36
3	Dealers					2.36
4	Bridging Fund					6.20
5	Marine Transport Average (MTA)					0.15
6	Admin Charge					0.30
7	Total Margins					18.37
C	Total Cost					138.11
D	Retail Price Band					135 – 145

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