Federal government denies increase in fuel price



• Marketers shun import of petroleum products
• Operators blame CBN forex policy, PPPRA monitors diesel price

Oil marketers have refused to resume the importation of petroleum products, particularly petrol, until the Federal Government can guarantee them access to dollars at the official exchange rate fixed by the Central Bank of Nigeria (CBN). But the government has said that the action of the marketers has not led to an increase in the price of petrol.

The marketers told Nigerians yesterday to hold the CBN, the banker to the government, responsible for the scarcity of petroleum products as the apex bank has refused to make dollar available at the fixed rate of N305 to $1.

The refusal of the marketers to import petroleum products – petrol, diesel, kerosene, and aviation fuel – is the reason the country cannot exit the protracted energy crisis, where even cooking gas, firewood and coal are already out of the reach of Nigerians due to very high demand and cost.


There is no succour even from electricity supply to power homes and offices due to gas shortages arising from pipeline vandalism. This development, couple with the high inflation and weakening purchasing power has worsened the economic burden of the citizens.

The Guardian learnt that government, led by the Minister of Petroleum Resources, Ibe Kachikwu, opened discussions with marketers on Tuesday, with a view to wooing them into resuming the importation of petroleum products to avert crisis, since the Nigerian National Petroleum Corporation (NNPC) alone cannot sustain national daily need.

Although a major policy statement was expected at the end of the parley, nothing came out of it as most of the issues were not exhausted.

The meeting was attended by fuel marketers, officials of the NNPC and the Petroleum Products Pricing Regulatory Agency (PPPRA), led by the Acting Executive Secretary, Victor Shidok. The meeting was aimed at arriving at a roadmap that would bring marketers back into the importation of petrol.

But in a telephone conversation with The Guardian, one of the marketers, who attended the meeting, said: “CBN is refusing to grant us the window of getting dollars at the official rate of N305.

“If we can’t get dollars to buy at this rate we cannot import, because as the price of crude is rising so is the prices of refined products. Petrol today lands at $555/metric tonne, which puts landing cost at N148/litre, excluding other charges.”

The pump price of petrol is N145/litre and although the NNPC insists it has sufficient petrol stock of 1.3 billion litres of petrol, which can serve the nation for more than 38 days, its capacity to solely sustain importation to meet estimated daily national requirement of 40 million litres is in doubt.

A previous arrangement initiated by the minister between the CBN and the international oil companies (IOCs) to provide dollar to fuel importers at N305 had obviously crumbled.


The minister was quoted as saying that government was working very hard to find a solution that would allow marketers come back.

But in another telephone conversation, a high- ranking CBN source told The Guardian that “there was no such an agreement.”

He noted that the CBN could not have entered into such an agreement, as this presupposed that all parties concerned would fulfil their part of the deal. “In a situation where the CBN does not print dollar, it only depends on what is transferred to it, how can it sustain the agreement?” he asked.

But another source insisted: “The arrangement with the CBN did not crumble, the CBN still intervenes in terms of foreign exchange to marketers for the importation of petrol. But in the arrangement, there is no concessional rate at all. The rate at which marketers source dollar is still at the official rate or what is called inter-bank rate of N305 to the dollar.”

It is speculated that the pump price for petrol will rise to between N155 and N160 per litre next month, in which case the consumers would bear the full brunt of the price increases.

Already the pressure is beginning to show at the retail outlet as petrol supply especially to the far flung states in the North and Southeast diminishes. Even in Lagos, there is activities among motorists who now fill both tanks and cans at filling stations in anticipation of the impending lean supply of PMS.

Since the last pump price increases last year, the PPPRA has not updated its pricing template to enable Nigerians to determine the true pump prices of petroleum products.

But the PPPRA in a statement yesterday debunked all claims of imminent scarcity or pump price increases.

The statement read in part: “We want to assure motorists and commuters alike, that the products supply situation is robust and able to cater for the fuel needs of all Nigerians, pending when ongoing challenges are addressed.

“For the avoidance of doubt, the National Petroleum Products Stock data and import plan, currently indicate that the country has two (2) months (Premium Motor Spirit, otherwise known as PMS) sufficiency, hence as a corollary to the above, PPPRA also wants to inform the citizens that contrary to a widely-held belief on the status of HHK (kerosene), the product is fully deregulated

“We hereby appeal to all Nigerians to remain calm and desist from any form of panic-buying, as we assure them of our total commitment to adequate products supply and distribution across the country, in line with our mandate.”

Furthermore, The Guardian learnt that the NNPC is perfecting plans to import the first batch of petrol for the first quarter of 2017, which would come under the new exchange rate of N305 set by the Federal Government.


The PPPRA should have concluded the first quarter importation allocation in December, but that did not happen as the NNPC is now the sole importer of products due to the dollar scarcity.

A member of the PPPRA Board told The Guardian that the agency was gathering data for January price movement, which would determine its recommendations to government in the next four weeks. The board is scheduled to meet in Abuja.

“The PPPRA will continue to monitor the price in terns of the figures in January, that will enable the agency to provide a clear direction to what is needed to be done on a sustainable basis,” he added.

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