The Federal Government on Tuesday hinted that independent marketers might be allowed to sell petrol above the current regulated pump price N145 per litre, PUNCH reports.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, gave the hint in a presentation at an investigative hearing organised by the Senate on the lingering scarcity of the product in the country.
He said the N26 differential between the current pump price and the landing cost of the commodity was caused by the rise in the exchange rate.
The minister recalled that naira was 285 to a dollar when the pump price was raised to N145 per litre, adding that the rate would have to drop to N240 to a dollar for marketers to be able to sell at the official price.
Kachikwu stated that the government had come up an 18-month emergency period within which issues affecting supply and pricing of the commodity should be solved.
The minister said the government was considering three models for the regulation of the pump price of petrol, one of which is a “plural pricing system” that would allow independent marketers to either stick with the distribution chain of the government and the official price, or sell the commodity based on the variations in the importation and landing costs.
The minister explained that while the government could retain the current official pump price of N145, marketers who were not okay with its supply chain could be allowed to import and distribute the product independently.
Kachikwu said: “We are looking at an 18-month emergency period. During this emergency period, we need to address the issue of pricing. There is price disparity between the landing cost and the cost of selling. If we must sell at N145 (per litre), we need to put mechanisms in place so that the private sector can go back to importation. We now have a committee that is looking at this and it will be subjected to review.
“The landing cost of the product today is about N170 or N171. The price that we should sell is N145. So, there is a disparity. What that means is that those individuals who are bringing in theirs will not be able to meet their obligations like the NNPC for commercial supply. We need to step back.”
