According to oil marketers, starting in July, the petrol price at the pump in Northern Nigeria could exceed N700 per litre.
According to Mike Osatuyi, National Controller Operations for the Independent Petroleum Marketers Association of Nigeria, when independent marketers begin importing goods in July, prices in the north may soar above N700.
While residents of the northern states may spend as high as N700 or more for one litre of petrol, he said those outside of Lagos should plan to pay about N610, whilst Lagos residents will pay about N600 per litre.
“What I am seeing is around N600 and above, depending on the exchange rate, the current crude price at the international market and the landing cost. Those in Lagos will pay around N600, those outside Lagos around N600 plus, while those in the north would be paying anything from N700 and above,” he said.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority are still licencing businesses seeking to engage in the importation business as the downstream sector waits for new petroleum products.
On Tuesday, Olufemi Adewole, executive secretary of the Depot and Petroleum Products Marketers Association of Nigeria, told The PUNCH that the NMDPRA is now licensing additional importers.
He stated that preparations for fresh items starting in July were well underway and added that product prices will be based on market factors.
“Where do countries like Ghana, Benin, and Cameroun get their products from? Is it not from Nigeria?,” he asked, referring to products smuggling from Nigeria to neighbouring countries.
“Prices of products will depend on market fundamentals, and as we speak, the Nigeria Customs Service is delaying some AGO (diesel) vessels because of the 7.5 per cent VAT.
“And don’t forget, any cost incurred by marketers would be added to the landing cost and then to the pump price. The marketer would also have to add profit because they must make a profit,” he said.
In a conversation on Monday, Tunji Oyebanji, the chief executive officer and chairman of 11 Plc and a former chairman of the Major Oil Marketers Association of Nigeria, advised consumers to anticipate new pump rates comparable to those of diesel and nearby African nations that import gasoline.
According to The PUNCH, the cost of a litre of petrol in Ghana, Cameroun and Benin was already above N800 as of June 19.
In Nigeria, petrol is currently N495 or more, while diesel is close to N800 a litre.
“The truth now is that if you look at the prices of other West African countries that also import petrol, then, you will have an idea of what the price will likely be once companies start importing. So, if the price we have now is not anywhere close to theirs, then, we are not yet there. Another indicator should be the current price of diesel,” he said.
Oyebanji, however, added that the price could also be reduced depending on the exchange rate.
“The bottom line is that there will be a price adjustment. Yes, it may go up now. It could also drop depending on the exchange rate. But the good thing is that products would be everywhere, and if you see that yours is more expensive than those of the filling stations around you, you will be forced to bring down prices so customers can come and buy. There would be healthy competition, which would be good for the market,” he said.
Earlier in a chat with The PUNCH, Osatuyi described the current petrol price as a “transitional price.” He added that marketers were expecting a roadmap from the Federal Government following the removal of subsidies.
“We are expecting the roadmap from the Federal Government following the meeting with labour. Labour has said they are giving the government two months to come up with the roadmap. We also expect the roadmap on how to deepen the use of Compressed Natural Gas.
“Already, three marketers have confirmed that they will start bringing in products starting in July. That’s when we would know the real price of products because it would increase. This current price is just a transitional price,” he said.
Since the federal government’s official announcement on May 29 that the downstream market would be deregulated, the petrol price has skyrocketed above N490/litre at stations affiliated with the Major Oil Marketers Association of Nigeria and above N500 at IPMAN outlets nationwide.
According to the chairman of IPMAN Satellite Depot, who spoke to The PUNCH, marketers were still loading goods at the N496 per litre price set by government regulation.
