The Federal Government may increase the price of Premium Motor Spirit (PMS), popularly called petrol, to a minimum price of N180 or above anytime soon. Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, dropped the hint, saying that the current price of N145 per litre can no longer be sustained.
The minister, in his presentation to a joint committee on Petroleum (Downstream) of the Senate and the House of Representatives, said the landing cost for petrol stood at N171 per litre. The cost of N26 per litre, representing the difference between N171 and the current official price of N145 per litre is borne by the Federal Government, through the Nigerian National Petroleum Corporation (NNPC), according to Kachikwu.
He insisted that independent marketers would not be able to import the product at the current foreign exchange rate. Marketers he said were able to sell for N145 per litre when the exchange rate was N285 per Dollar. The Naira presently exchanges for N365 per Dollar.“We now have to go back and find the solution to this problem in order to ease supply gaps and ensure availability of the product at all times,” he said.
According to the minister, three things could be done to pump price increase which include: getting the Central Bank of Nigeria (CBN) to introduce a modulated foreign exchange rate specifically for importers of the product; giving the marketers significant tax adjustments to enable them to absorb the high cost; and a plural pricing system whereby the NNPC would continue to sell at N145 through its numerous outlets while the marketers are allowed to fix their own price.
Tags
Society