The Federal Government may increase the price of Premium Motor Spirit (PMS), popularly called petrol to a minimum price of N180 and above anytime soon.
Going by a presentation made by Minister of State for Petroleum Resources, Dr Ibe Kachikwu, the current price of N145 per litre can no longer be sustained; due to the landing cost of petrol which still stands at N171 per litre
According to him, the Federal Government, through the Nigerian National Petroleum Corporation (NNPC) has been bearing the cost of N26 per litre, representing the difference between N171 and the current official price of N145 per litre.
Dr Kachikwu once explained that the price of petrol rises with the rise in the price of crude oil in the international market; in effect, any rise in crude oil price increases the amount the country spends on the importation of fuel.
The following reasons are responsible for why fuel scarcity will continue until the pump price is reviewed:
Foreign exchange rate:
Independent marketers would not be able to import petrol at the current foreign exchange rate, marketers are able to sell for N145 per litre when the exchange rate was N285 per Dollar. The Naira presently exchanges for N365 per Dollar.
Diversion of products:
Despite all efforts by security agencies to beef up surveillance and enforce distribution of petroleum products to the intended destinations, there is still a highly significant hoarding and diversion of petrol across the country, most trucks that are loaded to supply products to specific stations get diverted elsewhere as well as smuggled out of the country to be sold at exorbitant prices.
Recently, about 4500 distribution trucks failed to return to depots to complete their distribution formalities during the scarcity period, meaning that the trucks were diverted.
Opening up of production lines/refineries:
If the federal government does not open up production lines, specifically the refineries, to address supply gaps that usually leads to incessant scarcity or review the pump price there will continue to be fuel scarcity