People & Money

Petrol Price Rises in Nigeria for a Fifth Time in 2020

The Pipeline and Product Marketing Company (PPMC) on Thursday issued a circular that advised petroleum marketers to sell petrol within the band of N168 per litre to N170 per litre, after a review of the prevailing market fundamentals for the month of November 2020.

The hike in price, which takes effect from Friday, 13th November 2020, is the fifth such increase in the past five months. In October, the ex-depot price was unchanged and traded at 151.56 per litre as set by PPMC in September. At that price, the pump price of fuel was sold between N158 and N162.

In May, the Petroleum Products Pricing Regulatory Agency (PPPRA) announced a new pump price range between N121.50 to N123.50 per litre. Then in July, the pump price of fuel was increased to between N140.80 and N143.80, and a month later, it was again hiked to between N145.86 and N148.86. The last increase was on September 2, 2020, when it was further increased to between the range of N158 to N162.

“The EDC may please refer to the Management directives in respect of the above subject as per the attached memo,” PPMC’s memo reads. “In line with the above, we propose PPMC November 2020 actual prices for PMS with effect from 13 November 2020 as follows: PPMC ex-Coastal Price: N130.0, PPMC ex-Depot Price (collection): N155.17.”

Also Read: Petroleum Subsidy: FGN-Labour Deal Impossible This Time

In deference to this hike, the Independent Petroleum Marketers Association of Nigeria (IPMAN) Kano branch has directed its members across the state to sell Premium Motor Spirit (petrol) from N168 to N170 per litre.

The Chairman of IPMAN Kano branch, comprising Kano, Bauchi, Jigawa, and the Katsina States, Bashir Dan-Mallam, gave the directive while addressing newsmen in Kano on Friday.

The association heeded PPMC advice for the upward review of the pump price of petrol as contained in the circular, he said. “I call on all our members within our branch to immediately change the price of their litres from N160 per litre to between N168 and N170 per litre.”

”This development came after we received a circular from PPMC, advising us on the upward review of the price after it reviewed the market fundamentals for the month of November 2020,” Dan-Mallam said, assuring the public of the association’s commitment to ensure steady fuel supply across the state and beyond.

Why the hikes?

The ex-depot price is the price at which depot owners sell the commodity to retail outlets. Marketers add the cost of transporting the commodity from the depots to their retail outlets, as well as other costs such as marketers’ margin, to determine the final pump price, which may now be between N168 and N170.

But the frequent increases come in the wake of a move by the federal executive council to conduct a monthly review of petroleum products prices in line with international market prices. This was part of the deregulation of the downstream sector initiated following the impact of the COVID-19 pandemic.

Also Read: Dangote Refinery Reaches 80% completion, to Start Selling Petrol Next Year

The Nigerian National Petroleum Corporation (NNPC) no longer absorbs the difference between the landing cost and the pegged retail price, which in other words, is the removal of subsidy on petrol products.

While the government is still in charge of fixing the price of petrol as Minister of State for Petroleum Resources Timipre Sylva said in September, market forces of demand and supply and crude oil price would continue to determine the cost of the product.

Hikes in petrol prices have always been met with opposition from the public. In September, there were demonstrations against increases in petrol prices and electricity tariff in different parts of the country.

“Increasing petrol prices and electricity tariffs at a time people are losing jobs, businesses are not moving in the light of COVID-19, is, to say the least, wicked,” Secretary-General of the Trade Union Congress of Nigeria (TUC) Musa-Lawal Ozigi said in a statement at the time.

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