NNPC warns against panic buying, says ‘no plan to increase pump price’

The Nigerian National Petroleum Corporation (NNPC) says the recent increase in bridging allowance to transporters from N6.20 to N7.20 per litre will not lead to an increase in the pump price of petrol.

Henry Obih, chief operating officer (COO) in charge of downstream operations of the corporation, said this in Abuja on Wednesday.

He explained that the rise in the bridging cost was achieved after an adjustment was made in the “lightering expenses” from N4 to N3 per litre and the difference transferred to compensate for the cost of bridging within the same template.

The bridging allowance is the cost element built into the products pricing template to ensure a uniform price of petrol across the country, while lightering expenses involve charges for moving products to depot area from mother vessels by light vessels due to the inability of the former to berth in shallow water depth.

“What happened, in simple language, is a rebalancing of the margins allowed and approved for stakeholders,” he said.

“So, what the Petroleum Products Pricing Regulatory Agency (PPPRA) did was to take N1 from lightering expenses and add same to the bridging allowance. That is how we arrived at N7.20. Therefore, PMS remains at the ceiling of N145 per litre.”

On the availability of product supply, Obih said as of today, the country had 1.3billion litres of petrol which translated to an inventory of 36 days.

“What this means is that even if we stop importation or refining of petrol right now, we have enough products in-country to provide for the needs of every Nigerian for a period of 36 days,” he said.

Obih noted that the supply availability was bolstered with the production of petrol from the three refineries located in Port Harcourt, Warri and Kaduna.

“There is absolutely no risk of shortage in supply as we also continue to import to support the production from the refineries, we have informed the Department of Petroleum Resources, DPR, to enforce the prevailing N145 per litre price regime and also ensure that every service station that has fuel is selling to the public.”

Maikanti Baru, group managing director of NNPC, had announced the review of the bridging allowance on Monday at a mediation meeting between the Petroleum Tanker Drivers (PTD) and the Nigerian Association of Road Transport Owners (NARTO), leading to suspension of a strike action embarked upon by members of National Union of Petroleum and Natural Gas Workers (NUPENG).