Marketers in the dark over ‘N85 petrol price’

Fuel retailers are completely in the dark over the planned reduction of petrol price from N87 to N85.

Ibe Kachikwu, the minister of state for petroleum resources, announced in Port Harcourt, Rivers state, on Friday that the new pump price will take effect from January 1, 2016.

But executives of petroleum marketing companies who spoke off-the-record with TheCable on Saturday said it was news to them.

“In the past, the major stakeholders in the industry were consulted about major decisions like this. We held meetings. We were put in the picture, but that is not the case this time around,” a senior executive of a Lagos-based marketing company said, requesting not to be named because it is a “sensitive matter”.

Another executive said he thought marketers were very critical to the implementation of the new price and wondered why they are still in the dark over it.

“There are established processes for decision making, policy briefing, implementation template and public announcement for a significant change of this nature,” he said.

Kachikwu as much as admitted that the marketers were not part of the decision before it was made public, saying they would be informed later.

The minister, who is also the group managing director of the Nigerian National Petroleum Corporation (NNPC), said: “The new PPPRA template was signed off yesterday (Thursday). In the next couple of days, marketers will be duly advised. We have to reflect these prices to reflect realities of crude market.”

He said the objective “is two-fold” — to discontinue subsidies and improve government revenue.

“One, we cannot afford to continue to subsidise when we can’t even understand where those subsidies are going to. There’s a lot of fraudulent element involved and we have to cut that off,” he said.

“Secondly, the earning capacity of government is deteriorating by the day due to lower prices of crude. So applying that, what we landed when we did our analysis for the first time was about N85 or N86, so it’s below N87.”

Kachikwu’s latest statements suggest that subsidies will be abolished and government would soon start earning additional revenue from sale of petrol.

He was silent on kerosene.

Various reports in the past quoted Kachikwu as saying petrol would sell for N97, which he denied, and President Muhammadu Buhari told the national assembly at his budget presentation that fuel would remain at N87 “for now”.