Fuel Depot Price Is Now 151 Naira. Should We Run To Togo?

September 3, 2020

Citizen is a column that explains how the government’s policies fucks citizens and how we can unfuck ourselves.

The ex-depot price of Premium Motor Spirit (PMS) or Petroleum is now N151.56 per litre. Of course, you won’t find this dark news on the PPMC’s website (except you go on the dark web, haha). But the Petroleum Pricing Marketing Company is the subsidiary of the NNPC empowered to “profitably and efficiently market refined petroleum products” in Nigeria, and they have dealt us their hand, albeit via kurukere and under g means.

Peep the “Internal Memorandum”:

How Does This Affect The Price of Garri In The Market?

Tbh, this news shouldn’t come as a surprise. NNPC’s Mele Kyari had announced since April that there was no more subsidy on fuel products, which means that government was no more paying the difference between the Expected Open Market Price (EOMP) of fuel and the pump price.

Basically, how fuel subsidy works is that government pays the difference between the EOMP and the pump price (or retail price), so that you, the consumer and citizen, does not not end up paying an overly exorbitant price for fuel.

The EOMP contains the purchase, landing and distribution cost of refined petroleum. The government pays a part of this price so that the end price is bearable to Nigerians. This end price is then the “pump price or retail price” of fuel, and all of this prices are regulated by the PPPRA – Petroleum Products Pricing and Regulatory Agency. Of course, the agency responsible for the pricing of petroleum products in Nigeria.

Again I ask, Will Garri Be More Expensive?

Pardon my fixation with Garri. I really like Garri I can’t lie, even though not like some oga I know whose name start with a certain F. But, is this fuel price increase bearable?

Tbh there has never been a good time to increase product prices anywhere in the world. I mean, I have never heard a Nigerian market woman talk about good sales during Xmas. Its the same old “Market is not moving this year o”.

But this roughly N151 per litre ex-depot price increase is particularly notable because crude oil is only selling at $45. So why should fuel prices be increasing this much when the cost of the underlying commodity, crude oil, is still low. I mean, China has to buy crude oil before refining and selling back to Nigerian marketers. So why this high retail cost? And then it struck me – foreign exchange.

Note that fuel price increase for August was N138.52 per litre. And so what we have in Sepetember is a N13.04 increase. Meanwhile, June’s recommended fuel price was N121.50 per litre. So what is the message? It is that the landing cost keeps getting higher? Perhaps because of the devaluation of the naira and the increase in dollar.

But this price would have been offset if there was a subsidy, which there currently isn’t. What’s more? The PPPRA who stated that they would be issuing monthly “market based guiding price for petroleum” have not issued anything for two months now.

And We Have Been Talking About Ex-Depot Price

Note: Ex-depot price, not retail or pump price.

Essentially, oil marketers like your ‘filling stations’ will still have to input additional prices after purchasing a litre of oil from the depot at N151.56. Many of them have stated that retail price are in para mode and they have stated that retail price may go as high as N160, as they will add “whatever the NNPC has added to the depot price”.

Well, we just have to wait and see, and drink more Garri. Nothing is impossible with MBuhari on the throne.

Check back every weekday by 10am for more Zikoko Citizen articles.

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