Petroleum products marketers have approved the proposal by the Federal Government to increase the official pump price of petrol from N165 per litre to between N320 and N340 per litre in 2022, New Telegraph’s findings have shown.
The approval is in principle in view of the problems in the downstream sub-sector and the economy in particular.
This is as the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mallam Kolo Kyari, disclosed the plans to increase fuel price to between N320 and N340 per litre in Abuja, recently.
Kyari reemphasised the need to remove subsidy on the product by mid-2021, following several failed efforts in the past. He spoke at a stakeholders’ forum.
According to the marketers who spoke to New Telegraph on the issue, the plans by government to remove subsidy and later increase the pump price of fuel in 2022 are welcome in view of the challenges facing the sector.
The President, Major Oil Marketers Association of Nigeria (MOMAN), Mr Clement Isong, said that increase in price of fuel in Nigeria was sanctosant in view of the problems facing the sector.
He advised the Federal Government to map out strategies on how to mitigate the harsh effects of increasing the prices of petroleum products, stressing that government must provide intervention programmes for vulnerables in Nigeria.
He said: “Though the Federal Government is yet to tell Nigerians about the intervention programmes it is having in place for the vulnerables, especially the poor working class, the need to implement such measures is important.”
Isong said increase in price of fuel had both advantages and disadvantages, stressing that the country, in the real sense of it, needed to raise the price of the product in view of the happenings in the sub-sector.
He said the best way to mitigate the impacts of hike in price is to provide succour for the poor.
Similarly, a marketer, who does not want his name in print, said that he was not in a position to comment on what NNPC’s GMD said on fuel issue.
According to him, “Mallam Kyari has said the price of fuel would increase and it is obvious that increase in price of fuel would come one day, who am I to disprove the GMD of NNPC.
“Whether the price of fuel is going to increase or not, the margins at which marketers would sell fuel to Nigerians are still the same.”
He said the only area of concern is when there is demurrage and government is not ready to do anything on it, adding that government knows the effects of such actions and its working to prevent it.
The National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Chinedu Okoronkwo, was unable to comment on the matter as calls made to his mobile phone were not answered.
Recalled that the Federal Government had spent a lot of money on subsidy, with little or no improvement on the sector.
The four state-owned refiniries namely Port Harcourt 1&2, Warri and Kaduna are in bad shape, a development, which has made it difficult for them to refine any product.
The Federal Government had, in March this year, unveiled plans to spend $1.5 billion to revamp the Port Harcourt refinery.
Minister of State for Petroleum Resources, Chief Timipre Sylva, had said the rehabilitation of the refinery would be done in three phases of 18, 24 and 44 months.
The contract for the rehabilitation of the refinery was awarded to an Italian company, Tecnimont spa, which is an expert in refinery maintenance, while the funding will be sourced from the Nigerian National Petroleum Corporation (NNPC), Internally Generated Revenue (IGR), budgetary allocations provisions and Afreximbank.