The Federal Government is considering a downward review of the price of premium motor spirit (PMS), popularly called petrol, from April 2016, Mr. Farouk Ahmed, executive secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), has revealed.
Ahmed, who was among top government functionaries relieved of their posts by a presidential directive on Tuesday, disclosed this on Thursday in Abuja while handing over to Mr. Moses Mbaba, PPPRA’s most senior officer.
He said, as of February 3, 2016, about one month after the review of the pricing template of petrol, the country had saved N2.6 billion as over-recovery on the product.
The current pump price of PMS is N86 per litre at all NNPC Mega Stations while major and independent marketers are supposed to sell at an official rate of N86.50 per litre.
According to the erstwhile PPPRA boss, the decision on the review of the price of PMS would be taken next month by Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, after due consultation with stakeholders, based on the price of crude oil in the international market.
“Yes, wait till March, you will see, because the minister is fair in the decision he will take; he will take the decision pragmatically,” Ahmed said, when asked about the possibility of a likely reduction in the price of petrol.
He added that due to the current state of over-recovery, the PPPRA is recovering some money from the Nigerian National Petroleum Corporation (NNPC) and oil marketers.
He noted that, as at February 16, 2016, over-recovery was N13.81 per litre, stating that an over-recovery of N13.81 meant that the landing cost of PMS was lower than the selling price by N13.81.
However, as at the close of business on Thursday, the over-recovery recorded by the country had dropped to N11.74 per litre, according to data obtained from the PPPRA website.
Ahmed said in instances of over-recovery, the agency sent debit notes to every marketer that fell within that bracket to refund the excess money to government, adding that the fund was kept in an account recently opened at the Central Bank of Nigeria (CBN).
“As at February 3, 2016, the estimate in that account, because we are verifying based on what was imported, is a small amount of about N2.6 billion. But this is just the beginning because some of them are just arriving in December. That is why the subsidy over recovery is low,” he said.
Ahmed, however, noted that the over-recovery might no longer exist if the price of crude oil rises by next month.