Nigeria’s House of Representatives has faulted the current pricing template for petrol, calling for a pump price not above N70.04 per litre.

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The House has asked the Petroleum Products Pricing Regulatory Agency and Ministry of Petroleum Resources to review the current template with a view to bringing down the price of the product.

The landing cost of the product is currently N119.74k. But the distribution margin and other costs add up to N18.37k. It then brings the total to N138.11k.

But marketers are free to sell petrol in the range of N140 and N145 per litre.

Unnecessary factors responsible

However, in a motion moved by Abubakar Hassan-Fulata, the House noted that 90 per cent of the current cost of PMS (N124.34k) was introduced by unnecessary factors.

It then said the factors were related to transport charges, which were transferred to consumers by the marketers.

Members of the House argued that removing such unnecessary charges would not affect the profit margin of the marketers if all the needed infrastructure is in place.

In his lead debate, Hassan-Fulata listed some of the charges as lightering expenses, N4.56k; bridging fund, N6.20k; freight, N109.01k; NPA charges, N0.84k; and transport allowance, N3.36k.

Landing cost faulted

He further said the landing cost had inbuilt charges. According to him, when the cost is removed, it would not affect the profit margins of the importers and marketers.

Fulata cited jetty charges, NIMASA charges, storage charges and retailers’ margin, among others, as costs that could be removed without affecting the profit margin of the marketers.

“Bridging is supposed to be an annual event only when the refineries are carrying out their turnaround maintenance, which does not exceed three months.

“However, due to the fact that the pipelines linking the various depots have been vandalised or are in a state of disrepair, bridging has remained a permanent feature of the oil industry in Nigeria.”

The House further directed the Ministry of Petroleum Resources to ensure that the price review was done within eight weeks.