FG's move to hike fuel price thickens as scarcity persists
There are indications that the federal government may increase fuel price to address the problem of fuel scarcity, which has persisted since December 2017.
Bauchi State governor, Mohammed Abubakar gave the hint yesterday while briefing state House correspondents after the National Economic Council meeting presided over by Vice President Yemi Osinbajo at the Presidential Villa, Abuja.
Abubakar said the Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Maikanti Baru briefed the council on the reason why the fuel scarcity still persists.
According to him, a NEC committee headed by the Gombe State governor, Ibrahim Dakwambo will interface with NNPC with a view to determining the correct price for PMS considering the price of the product in countries bordering Nigeria.
He said, “The second issue that was discussed was the issue of the scarcity of petroleum product. The problem was addressed by the Group Managing Director of the NNPC.
“The issue is of course caused by an inter-play of the exchange rate of the naira and the dollar and the price of crude oil at the international market which, affects the landing cost of refined products in Nigeria and in the process makes the operation of the current price regime almost impossible.
“As at today, most if not all independent marketers have stopped importing refined products into Nigeria. It is only the NNPC that has been doing it, and the NNPC has been suffering a lot of setbacks and the highest amount of under-recovery.
“By under-recovery it means the interplay between the landing cost of a litre of the PMS in Nigeria and the pump price of that product. If the product lands at N170 for example and you sell at N145, immediately you know that you have an under-recovery of about N25 for each litre of fuel.
“The National Economic Council has a committee that has been interfacing with all revenue generating agencies of the federal government under the chairmanship of the Governor of Gombe State.
“That committee has been charged with the responsibility of interfacing with NNPC with a view to determining the correct price for PMS considering the price of the product in especially countries that are bordering Nigeria. Because that is one of the reasons that encourage smuggling of the products to these areas.”