By Ejiofor Alike
The ex-depot price of Premium Motor Spirit (PMS), otherwise called petrol, has crashed as imported products flood market, signalling an end to the long queues experienced at filling stations in Abuja, Lagos and other parts of the country.
Queues recently resurfaced in various parts of the country following the inability of marketers to import sufficient fuel at the first quarter of 2012 due to the refusal of banks to fund importation.
The development had jacked up ex-depot price to about N95 per litre as against the N88 per litre approved officially by the Petroleum Products Pricing Regulatory Agency (PPPRA).
The scarcity was felt at the pumps as prices also jumped above N100 per litre, as against the official price of N97, with motorists queuing for hours before getting products.
But with the banks currently providing credit to the marketers, after the intervention of the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, the ex-depot price is crashing down to normal as imported products flood the market.
Investigations at the weekend revealed that most private depots in Lagos were selling between N91 and N92 per litre, as against N95 they were selling during the crisis, while the pump price has stabilised at N97 per litre, with no queues at filling stations.
However, this ex-depot price is still below the official price of N88.90 recommended by the PPPRA.
THISDAY also gathered that only the Nigerian National Petroleum Corporation (NNPC) adhered to the official price as it was selling PMS at the ex-depot price of N88.90 per litre, below the ex-depot price of private marketers.
Some of the marketers, who spoke to THISDAY, attributed the crashing prices to increased importation of products.
“Everywhere is getting wet because the banks are now supporting importation. Prices are now coming down,” he said.
On the refusal of the marketers to adhere to the official ex-depot price, he noted that marketers incurred other costs that were not captured by the PPPRA template.
“There is no way the private marketers can sell at official ex-depot price at break even. The marketers incur certain costs that are not accommodated in the PPPRA template. The NNPC sells at official price because as a government agency, they are exempted from paying certain charges. The case of private marketers is different. NNPC always sells PMS at lower price but no marketer can do that and break even,” he said.
The PPPRA recently delisted non-credible marketers from fuel importation and ensured that only genuine marketers, with track records of performance received allocation for the second quarter of 2012.
Before the release of the 42 beneficiaries of the second quarter allocation, a lot of pressure was mounted on the management of PPPRA to increase the number of the beneficiaries, which were over 100 in 2011.
The allocation to the marketers during the period, according to the PPPRA, was based on marketers’ performance in the past and their ability to secure the needed fund.
PPPRA also promised not to sanction the marketers for their poor performance in the fourth quarter of 2011 and the first quarter of 2012 because their performance was due to the “force majeure” in the operating environment.