Following the resumption of talks between the Federal Government (FG) and the leadership of the Organised Labour over the recent hike in the price of fuel and electricity tariff, the FG has agreed to slash fuel price by N5.
It will be recalled that the Petroleum Products Marketing Company, a subsidiary of the Nigerian National Petroleum Corporation, in November, increased the ex-depot price of Premium Motor Spirit, also known as petrol, to N155.17 per litre from N147.67 per litre.
The implication of which, allows Marketers sell between N168 - N170 per litre.
Following heavy backlash, the FG slashed N2 from the depot price of N155.17 per litre, a move that still didn't sit well with the leadership of the Organised Labour who threatened mass action, if the price was not reverted.
The meeting between the Federal Government and Organised Labour have ended in Abuja.
The five-hour long meeting agreed that the price of petrol be reduced by N5 while labour also got a commitment from the government that the distribution of free prepaid metre will begin soon across the country.
Organised labour had two weeks walked out of the meeting with the Federal Government on the ground of a new increment in the price of fuel when negotiations were still on course.
The Festus Keyamo-led Committee is to continue its assignment and ensure conclusion in record time.
However, projections by marketers have it that the pump price of Premium Motor Spirit, popularly known as petrol, may hit N180 per litre this month as oil prices extended their rally on Monday, with Brent crude trading near $50 per barrel.
Brent, the international oil benchmark, has risen by more than 15 per cent since November 13 when the pump price of petrol was adjusted in the country. It stood at $49.39 per barrel as of 7:29pm Nigerian time on Monday.
The Minister of State for Petroleum Resources, Timipre Sylva, had said in September that the Federal Government had stepped back in fixing the price of petrol, adding that market forces and crude oil price would determine the cost of the product.
The National Operation Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, said fuel prices might increase before the end of December, considering the current realities in the market.
“Once we have deregulated, petrol price is a function of crude oil price. If in the past few months, oil price has hovered around $40 to $44 per barrel, when it moves to $49-$50, we have to be expecting nothing less than N180 per litre of petrol,” he said.
Osatuyi, in a telephone interview with our correspondent on Monday, said petrol price could reach N200 per litre if oil price crossed the $50 per barrel mark.
“The devaluation of naira by N6 will actually have effect on the pump prices of fuel maybe by the end of this month or early next year,” he added.
He faulted the current situation in which the Nigerian National Petroleum Corporation remained the sole importer of petrol into the country despite the deregulation of petrol price.
“As at today, NNPC is still practicing monopolistic deregulation because it is the only one importing petrol for Nigeria. If you deregulate, you are supposed to make forex available for other players,” he said.
The Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, also told our correspondent that private marketers were still unable to import petrol because of lack of access to forex.
He said marketers were also concerned about the discussion between the Federal Government and labour regarding deregulation, adding that discordant tunes would leave investors worried.
“The impression has been that deregulation has been agreed with labour already. It would always help when you know clearly the direction of government,” he added.
The Federal Government removed petrol subsidy in March this year after reducing the pump price of petrol to N125 per litre from N145 on the back of the sharp drop in crude oil prices. The price reduction lasted till June.
Nigerians have seen increases in the pump prices of petrol four times in the past five months, rising from N121.50–N123.50 per litre in June to N140.80-N143.80 in July, N148-N150 in August, N158-N162 in September and N163-N170 in November.
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