Marketers stockpile petrol over possible price increase

Fuel scarcity in Lagos

Oil marketers resorted to stockpiling Premium Motor Spirit, otherwise known as petrol, as rumours of an imminent increase in the pump price of the commodity spread on Monday.

Our correspondent gathered that many of the marketers doubled their orders for the product and even elected to pay more than what they normally paid prior to now in order to increase their stock.

A marketer, who witnessed happenings at some tank farms and depots in Apapa, Lagos on Monday, said, “The government said it that as soon as the price of crude oil goes up, it will review the prices of products. This is why the marketers today bought more than they used to buy in the past, because nobody knows what is going to happen and everybody wants to enjoy the increase in petrol price if it eventually takes effect.

“Today (Monday), there was a noticeable increase in purchase; people doubled the payments for products. So, let’s just watch and see what’s going to happen in a couple of days or weeks.”

Another source said third-party marketers were willing to buy from those with tickets to load for as much as N91 per litre instead of the ex-depot price of between N84 and N85.

For about two weeks now, the Petroleum Products Pricing Regulatory Agency has refused to update the pricing templates for Premium Motor Spirit, popularly known as petrol, fuelling anxiety of an imminent increase in the pump price of the product.

The PPPRA, which is the agency of the Federal Government responsible for fixing and regulating the prices of white products like petrol and kerosene, last updated the templates for the commodities on April 28, 2016.

The agency usually provided updates for PMS and other petroleum products nearly every official working day.

It publishes the pricing templates for the Nigerian National Petroleum Corporation and for other oil marketers in the sector.

However, its recent refusal to provide the latest pricing templates for petroleum products was viewed by stakeholders in the industry as a clear signal of an imminent hike in the pump price of PMS.

Oil marketers told our correspondent that the pump price of petrol was bound to increase any time soon because of the rise in the price of crude oil in the international market though the administration of President Muhammadu Buhari had often kicked against the continued payment of subsidy.

They noted that the last template of the PPPRA on April 28 had shown that petrol was being subsidised by N12.62 per litre when sold at NNPC retail outlets, and N12.88 per litre at filling stations run by other oil marketers.

About two months ago, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, made it clear that the Federal Government had not returned petrol subsidy and was not planning to do so, but noted that it was effecting a price modulation mechanism that would consider the fluctuations in the prices of crude oil globally.

Kachikwu had also stated that the government would adjust the pump prices of PMS on a quarterly basis after conducting a review. This was supposed have happened in April.

It, however, did not happen as the country faced varying degrees of petrol scarcity, particularly during the planned review period.

Explaining why the price of PMS might be increased anytime soon, an official of a marketing company, who spoke on the condition of anonymity, said, “The government has been using the price modulation technique and as crude oil price is going up, it will be adjusting the pump price of petrol.”