Yesterday, Tuesday, the House of Representatives asked for a reduction in the price of petrol to N70.04 per liter, in a move that opposes the past declarations of other stake holders in the oil and gas sector. Abubakar Hassan Fulata sponsored the motion at the plenary session presided over by Speaker Yakubu Dogara, the lawmakers urged the Petroleum Products Prices Regulatory Agency (PPPRA) and the Federal Ministry of Petroleum Resources to review the current price template for PMS with a view to bringing down the price of the product.
It seems that the Reps had carried out their investigations properly and highlighted the several inefficiencies that significantly increase the price of petrol in Nigeria.
According to Fulata, over 90 per cent of the price of PMS was accounted for by transport-related charges. He said the only reason foreign vessels who charged higher for lifting the PMS were being used was that the nation’s carriers, which were supposed to lift 50 per cent of the product didn’t have the capacity to do so. As a result, the NNPC has to charter foreign vessels at significantly higher costs.
Another area of inefficiency in the petroleum import operation currently in place was exposed by Fulata. This is the provision of N4.56 per liter in the price template for lightering services. Lightering services involve the transfer of products from heavier vessels to smaller ones due to the inability of the heavier vessels to dock at the port.
Fulata argued that this was absolutely unnecessary and not in line with international practices, since all ships were supposed to dock at the harbor. However, in Nigeria, the heavy vessels lifting petrol are not able to dock at the nations ports due to shallowness of our harbors and siltation.
He lamented this situation wondering what the role of the Nigerian Ports Authority was, despite the commission it receives on each liter of petrol. “Although the NPA was paid N0.84 for every liter of petrol, it had failed to dredge the various docking areas, as a result of which ships waited at the high sea and discharged their cargoes in smaller vessels and for this inefficiency of the NPA, Nigerians were made to pay N4.56 for every litre of petrol.” he said.
If these inefficiencies were removed, he believes that the N70.04 per liter price tag will be realistic. This reduction would not affect the profit margin of marketers and transporters of the products, while it will ease the strain on Nigerians and reduce inflation.
The lawmakers resolved to set up an ad-hoc committee to interface with the ministry on the issue. They also urged the Nigerian Ports Authority (NPA) to dredge all harbors within one year to enable ships to dock.
