The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has attributed the recent hike in the pump price of petrol to the difficulty in landing the premium motor spirit (PMS).
Billy Gillis-Harry, PETROAN president, spoke during an interview on Channels Television’s ‘Morning Brief’ programme on Thursday.
“What I can tell you is once there is difficulty in landing products by NNPC and the size of shock absorbing that they can do becomes overwhelming, they will certainly shed some of the loads,” he said.
“I think that’s what would have happened.”
On Wednesday, the Nigerian National Petroleum Company (NNPC) Limited increased the price of petrol across its retail outlets.
In Lagos, petrol prices jumped to N998 per litre while in Abuja, the price rose to N1,003.
The price development comes weeks after the NNPC commenced petrol lifting at the Dangote Petroleum Refinery’s gantry after an extended period of price negotiations.
On September 15, the NNPC said petrol was bought from Dangote refinery at N898 per litre.
The Dangote refinery countered NNPC’s claim, describing it as “both misleading and mischievous”.
A day after, the national oil company announced estimated pump prices based on prices set by the Dangote refinery for its petroleum products, saying petrol will sell for N950 in Lagos and N999 in Abuja.
Gillis-Harry said the petrol prices are largely driven by market forces, particularly the dynamics of supply and demand.
He stressed that the exchange rate between the naira and the dollar plays a major role in the cost of petroleum products, as Nigeria operates a “dollarised” petrol business.
“The truth right now is that petrol prices are going to be determined by the forces of demand and supply,” he said.
“This does not mean that the prices will always be high. We must remember that our dollar exchange value is going to impact very highly on the cost of PMS because we are operating a dollarised business in naira.”
‘DANGOTE REFINERY COULD ALLEVIATE PETROL PRICE PRESSURE’
Despite the current price increases, Gillis-Harry expressed optimism about the role the Dangote refinery as well as other refineries in Nigeria could play in alleviating the pressure on petrol prices.
“The Dangote refinery should come to the rescue, as well as other refineries in Nigeria,” he said.
Gillis-Harry added that PETROAN is hoping to engage in formal and clear business discussions with the Dangote refinery to explore potential benefits for the industry.
