As Nigerians continued to lament over the high cost of petrol, the House of Representatives yesterday urged the federal government to reduce the current price of the product, known as Premium Motor Spirit (PMS). 

Appealing to Petroleum Prices Regulatory Agency (PPPRA) and the Federal Ministry of Petroleum Resources to reduce fuel price, the House set-up an ad-hoc committee to interface with the Ministry on the review of the pump price template and such related matters and report back within eight weeks for further legislative action.

The House also urged the Nigerian Ports Authority (NPA) to dredge all harbours within a period of one year, so as to enable ships dock in them. 

All these actions, the House pointed out are gear towards bringing down the price of the product.

The resolutions of the House followed the consideration and adoption of a motion on the ‘Urgent Need To Review the Petroleum Price Template sponsored by Rep. Abubakar Hassan Fulata (APC, Adamawa). 

Fulata, while presenting the motion, noted that the current template for the price of petrol could be reviewed downwards without affecting the profit margin of marketers and transporters and also contribute to reducing the current inflationary trend in the economy. 

He explained that the widely circulating rumour of a possible hike of petrol came at a time when the nation is going through difficult times occasioned by dwindling revenues, high inflation rate, unemployment and general fall in the standard of living of many Nigerians. 

Fulata noted that the landing cost of petrol is N119.74, while the distribution cost and margins of marketers is N18.37. 

“The total of both landing and distribution costs is N138.11, while marketers are allowed to sell product within the range of N140 – N145 per litre.  90 per cent of the current price of petrol in Nigeria is accounted for by the transport related charges i.e N124.34 out of N138.11,” he said. 

The lawmaker stated further that the only reason why foreign vessels charge higher for lifting petrol was that national carriers which were supposed to lift 50 per cent of the products do not have the capacity to do so as a result of which the Nigerian National Petroleum Corporation (NNPC) often results to chartering vessels at higher costs. 

He observed that “the provision of N4.56 in the price template for the lightening services is absolutely unnecessary, as in line with international practice, all ships are supposed to dock dock at the harbour. But in the case of Nigeria, the water in all the harbours is shallow due to siltation and the harbour therefore need urgent dredging. 

“The Nigerian Ports Authority is paid N0.84 for every litre of petrol, it has failed to dredge the various docking areas, as a result of which ships wait at the high sea and discharge their cargoes in smaller vessels, and for this inefficiency of the NPA, Nigerians are asked to pay N4.56 for every litre of petrol, which would not have been necessary if all docking areas had been dredged.”

Fulata highlighted the cost derivatives on the template as: “Cost of Freight – N109.01, Lightering expenses – N4.56, Nigerian Ports Authority Charges – N0.84, NIMASA Charges – N0.22, Financing – N2.51, Jetty through put charges – N0.60, Storage charge – N2.00, Retailers Margin -N6.00, Transport allowance – N3.36, Dealer’s margin – N2.36, Bridging Fund – N6.20 while Marine Transport average is N0.15 totalling N137.81.

“Landing cost of PMS is N119.74, while the distribution cost and margin of marketers is N18.37, thus, the total of both the landing and distribution costs in N138.11, while marketers are allowed to sell the product within the range of N140 – N145 per litre.

“Over 90 percent of the current price of PMS in Nigeria is accounted for by transport related charges, i.e, N124.34 out of N138.11 viz; Lightering – N4.56, Bridging fund – N6. 20, Marine transport – NN0.15, Transport allowance – N3.36, Freight Foreign – N109.01, NIMASA charges – N0.22; and NPA charges – N84 bringing the total to N207.5.”

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