There are strong indications that the official price of gasoline may rise above N200 per liter. The Nigerian National Petroleum Company Limited (NNPC)has implemented a N500,000 Ship-to-Ship Coordination Charge for each transshipment procedure for fuel for using its Marine Logistics. The levy on any transshipment operation was part of the NNPC’s efforts to completely recoup its operations costs following the passage of the Petroleum Industry Act, which created the national oil company a limited liability company. The following is taken from a note from NNPC Limited with the reference NNPC/ML/STS01, dated February 18, 2022, and issued to all marketers with the title “Payment of STS Coordination Charge,” signed by O.I O Ajilo on behalf of GGM Shipping.
NNPC Management has directed that the STS Coordination cost for each transshipment operation involving NNPC Marine Logistics will be charged at the rate of N500,000.00. This sum will cover the manpower and resources needed to coordinate and produce cargo documentation for transshipment operations. The accounting division will generate a remita payment request for each operation in order to effect necessary payment upon the boats giving notice of readiness, NOR.
According to an industry source, the process of treating off-spec PMS is continuing as recommended by chemists and analytical laboratories; sludge extracts are being treated and disposed of without causing environmental impact. the source explained that the Petroleum Products Marketing Company, or PPMC, brings in cargoes for the above-mentioned procedure and distribution to the general population, but that they need to do a lot more. Meanwhile, a top industry player noted that while NNPC Limited and its business units, all of which are also ‘Limited,’ are recovering all of their costs by passing them on to marketers, there is no approval for marketers to pass these costs on to the pump buyer, and marketers are unable to absorb these costs. It was learned that the NNPC’s cost recovery drive through the new transshipment tax led depot owners to hike the ex-depot price of petrol, forcing marketers to raise the PMS price over the permitted cost of N142-N145/litre. The majority of private depot owners have increased the ex-depot price of gasoline from the permitted N142-N145/litre to between N162 and N170/litre. This caused many independent marketers’ filling stations to sell gasoline beyond the allowed price, claiming that the cost of the commodity will soon reach N180/litre in most retail outlets, with the exception of mega stations and those operated by big marketers. About 90% of Nigeria’s filling stations are owned and operated by independent oil marketers.
With these developments a price hike is inevitable, although it’s pertinent to note that this isn’t the FG stopping subsidy payment but it’s rather the NNPC Ltd sourcing for extra means of revenue. The side effect as regards to pricing of Petroleum Products is that the final consumers are bound to pay more for the product, with also the current global crises rising from the Russia vs Ukraine war that has the price of crude oil currently at $110, all these with the new charges from NNPC indicates to a possible hike in prices of AGO PMS MGO DPK.
Source: Oriental News, Value Chain, Sun News.
