The pump price of petrol otherwise called Premium Motor Spirit(PMS) per litre will reduce to N117 from N125.50 at the weekend according to the circular from the Petroleum Products Marketing Company (PPMC).
The PPMC Wednesday, slashed the ex-depot price of Premium Motor Spirit (PMS), also known as petrol, to N108 per litre, a move reflecting the drop in crude oil prices. It is also expected to result in a lower pump price at petrol stations by end of this week.
In a memo to oil marketers and other stakeholders in the petroleum marketing business, dated May 5, 2020, with the subject: ‘Re: PPMC Petroleum Products Prices for May 2020,’ the PPMC also slashed the ex-depot price of Automotive Gasoline Oil, also known as diesel, to N164 per litre for depots in Lagos and N166 per litre for depots in Oghara, Calabar, Port Harcourt, among others.
The indicated that the new prices would take effect from May 5, 2020.
The ex-depot price is the price at which the depot owners sell the commodity to retail outlets across the country.
Though, the PPMC did not state the Expected Open Market Price of the commodity, which is the pump price at petrol stations, over the years, the difference between the ex-depot price and the pump price of petrol is usually around N9 per litre.
This means that at an ex-depot price of N108 per litre, the pump price of PMS would be around N117 per litre, N8 lower than the current pump price of N125 per litre in most petrol stations and N6.50 lower than N123.50 per litre at NNPC retail outlets.
The responsibility of fixing petroleum products prices lies solely with the Petroleum Products Pricing Regulatory Agency (PPPRA), but the agency is yet to release the pricing templates for May 2020, as against its promise that the templates would be released on a monthly basis, to serve as guide for products pricing for each month.
Commenting on the reduction, Group General Manager, Group Public Affairs Division of the Nigerian National Petroleum Corporation (NNPC), Dr. Kennie Obateru said, “The N108 new PPMC ex-depot price of PMS from N113.28 is a marketing strategy to make more sales while complying with PPPRA price template. We reviewed the ex-depot prices to enable us make more sales.
“For AGO, it’s a deregulated product and as such its prices are determined by market forces.”
PPMC, is one of the downstream subsidiaries of the NNPC.
Group Managing Director of the NNPC, Mallam Mele Kyari, had few days ago, hinted of a possible deregulation of the Nigerian downstream petroleum sector, stating that the Federal Government had eliminated subsidy and under-recovery in the industry.