The Federal Government has insisted that the price of Premium Motor Spirit (PMS) will not be increased.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, and the Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Maikanti Baru, said there was no immediate plan to increase the pump price of petrol.

Kachikwu and Baru, made the declaration after meeting with President Muhammadu Buhari at the Presidential Villa, Abuja on Monday.

Last week some former NNPC GMDs had said that due to the dollar scarcity and the falling naira, it would be unrealistic to expect the petrol price to remain at the current price of N145/litre.

After meeting with Buhari, Baru refused to speak at length, as he referred journalists to the PPPRA.

Asked if there would be a review of the price, he said, “The NNPC has no plans of increasing the price of fuel.”

Kachikwu also declined to comment on the issue, but he revealed that there was no memo before the Federal Government asking for a review of the price.

Reaction to the issue, the NNPC confirmed that the former GMDs had raised an opinion for a price review.

The NNPC spokesperson, Garba Deen Mohammed, in a statement, however, said the position of the former GMDs was their personal opinion, which was not binding on government.

“The NNPC GMD was in that meeting, and it does not mean he shared their views. He was the convener of that meeting and he allowed them to express themselves as professionals in the industry.

“He did not want to interfere. And whatever views they expressed was not binding on him and not binding on the government also and in any case, the NNPC does not fix price, it is the duty of the PPPRA.  That is their opinion, whether government would increase price or not, I have no idea.

“The NNPC has no mandate to increase price of petroleum products. It is the mandate of the PPPRA. Only PPPRA has the mandate to increase fuel price and it is under the Ministry of Petroleum, just as the NNPC is also under the Ministry of Petroleum Resources.

“We have nothing to do with price increase. The template we are using today was not developed by the NNPC. It was developed by the PPPRA, and the NNPC is a player in the market just like every other player, like Oando, ExxonMobil, Total and Shell. We do not fix the price.

“As I speak to you now, a lot of people are selling below N145 per litre. So the issue of price hike does not arise, considering where we are coming from and the fact that things are hard. As far as that call to hike PMS price is concerned, it is the opinion of the former GMDs.”

Asked the real price of PMS, Garba-Deen said, “I don’t know, because so many variables are normally taken into account in arriving at any price. Foreign exchange is just one of them, because it is not part of our mandate, I cannot comment on it.”

The Ex-NNPC GMDs had made the suggestion of fuel hike at a one-day meeting called by Baru, where they argued that the current price cap of N145 per litre is not in line with the liberalisation policy especially with the foreign exchange rate and other price determining components such as crude cost, Nigerian Ports Authority charges, among others, remaining uncapped.

Present at the meeting, according to the NNPC, was the Minister of State for Petroleum/Immediate Past GMD, Dr. Emmanuel Ibe Kachikwu, represented by the Senior Technical Assistant, Engr. Johnson Awoyomi; HRM Edmund Daukoru, Chief Odoliyi Lolomar, Dr. Thomas M. A. John, Engr. Lawrence Amu, Dr. Jackson Gaius-Obaseki, Engr. Funsho Kupolokun, Engr. Abubakar Lawal Yar’Adua, Dr. Joseph Thlama Dawha and Maikanti Baru.

An official of one of the marketers’ associations, who spoke on condition of anonymity on the matter said, “Let the government do the needful. We have already said it before that the price is not sustainable. When they fixed that price, dollar was N280–N285; now the dollar is almost N400 and they want us to bring in products and sell at N145. It is not possible.

“But right now, most of us are getting the product from the NNPC; that is why you still see that there is product everywhere. It is an indirect case of subsidy. It means the government is subsidising it through the NNPC and we are buying at local price. Had it been that we were the ones that sourced the foreign exchange, we can’t sell it at N145.”

The Head of Energy Research, Ecobank Capital, Dolapo Oni, noted that the current template was adopted when the dollar was about N315 in the parallel market and the naira had not been floated then.

He said then the CBN was still selling at about N220 or so and marketers were augmenting what they got from the CBN with the parallel market supply, adding, “Thus, a range of N275 to N295 was used to arrive at the template price range of N135 to N145.

“The official market is N310 this (Monday) morning while the parallel market is N422. This gives a range of between N151 and N200. I think they’ll probably adopt a range of N330 to N370 (per dollar) so we have a fuel price range of N160 to N170.”

Oni added, “The best solution, in my view, however, will be to take the last plunge and just remove cap on prices. It is probably the best in this market. Let competition regulate prices.”

An official of one of the marketing companies in Lagos, said, “The position of the marketers is that if the guaranteed exchange rate of N285 to a dollar will not be met, selling at that N145 is not profitable. And that is the more reason most of the chief executives or finance directors are still going cap in hand to the NNPC to facilitate the forex they promised through international oil companies instead of going to the black market.

“With the current situation in the country, I don’t see the government increasing the pump price of petrol, although it is not profitable to marketers. It would have been very easy if forex is available to marketers at N285/dollar.”

On marketers’ reliance on the NNPC for petrol, the source said, “The advantage in depending on the NNPC product is that the price they give you is better and you are not subjected to any issue of forex. And it is not as difficult as before when you had to queue for a long time because the NNPC has the product.”