The Federal Government via PPPRA has announced another increase in the pump price of Premium Motor Spirit (PMS), to N143.80 per litre. As FG announces new pump price, market observers have also speculated that the increase in pump price might trigger other commodities to go up as well.
This new pump price was disclosed by the Agency Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Abdulkadir Saidu, in a circular dated Wednesday, July 1, 2020, to oil marketers.
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An excerpt from the circular reads,
‘’After a review of the prevailing market fundamentals in the month of June and considering marketers’ realistic operating costs, as much as practicable, we wish to advise a new PMS pump price band of N140.80-N143.80 per litre for the month of July 2020.’’
‘’All marketers are advised to operate within the indicative prices by the PPPRA.’’
You will recall that, during the heat and fangs of the lockdown and the COVID-19 period, the federal government had announced its intention to stop the subsidy arrangement regime as it had become certain that the downstream sector is well-funded by private principals due to its apparent deregulation. The government also said that the prices of all petroleum products would be fully determined solely by market forces, after the removal of the existing threshold on fuel prices.
PPPRA further said that it fixed the new price after considering costs and taking into consideration the operating costs of the oil marketers. According to PPPRA, oil marketers go through a lot of processes, fees, and logistics stress to get the PMS (petrol) down to its final consumers.
Early June, the Federal Government further brought down the pump price from N123.50 that it was reduced to in May, to 121.50 per litre. There are speculations that these price changes are the new representations of the oil market at every point in time.
As FG announces the new pump price on July 1st, this represents a-N20 per litre increase from the last price.