The pump price of petrol should be closer to N155 per litre, the Chairman of the Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.
Oyebanji, who is the managing director/chief executive officer of 11Plc (formerly Mobil Oil Nigeria Plc), said this on Tuesday on CNBC Africa.
Petrol price was increased by marketers to between N148 and N150/litre in August, as the Petroleum Products Pricing Regulatory Agency remained silent as regards the guiding retail price for the month.
Following the sharp drop in crude oil prices which led to the reduction in the pump price of petrol in March, the PPPRA had said it would advise the Nigerian National Petroleum Corporation and oil marketing companies on the monthly guiding retail price at which the product shall be sold across the country.
Oyebanji said the under-recovery of N5.35bn recorded by the NNPC in June had to do with the inventory losses that would have occurred because of the reduction in prices at the time.
He said, “However, going forward, we still note that there is still an element of subsidy because when you look at the prices that were posted for the month of August, for instance, NNPC is still retailing petrol at N145 when really the price should be closer to N155.
“If you look at the template the PPPRA has been using in setting prices, you will find that if you just apply even the official exchange rate and Platts for the month of August, prices at the pump should be significantly higher than where there are today.
“Obviously, something is not clear as to what really is happening. We suspect that there may be some issues to do with how margins are being applied to the various operators and the various subheadings within the template.
“So, we will continue to work with government to try and get clarification on this subject but definitely, it is very clear that there is still an element of subsidy.”
Oyebanji said the marketers would continue to engage the relevant agencies of government, particularly the PPPRA, to get an increase in their margins.