The National Economic Council (NEC), made up of state governors and chaired by Vice-President Yemi Osinbajo, has asked for “correct” pricing of petrol in the country.
While a litre of petrol sells for N145 in Nigeria, it goes for $1.07 (about N385) in Chad and Cameroon, and $1.00 (N360) in Benin Republic.
The ministry of petroleum resources recently revealed that the landing cost is N177 in the country.
NEC at its meeting on Thursday mandated its committee on the forensic audit of revenue accrued into the federation account, excess crude account and consolidated revenue fund to interface with the Nigerian National Petroleum Corporation (NNPC) to determine appropriate price for petrol.
They are to benchmark fuel pricing against neighbouring countries which TheCable Petrobarometer recently reported as encouraging smuggling of the product to those countries.
The NEC said the Petroleum Products Pricing Regulatory Agency (PPPRA) remains the appropriate agency to fix the price of petrol in the country.
The standing committee is chaired by Ibrahim Dankwambo, the Gombe state governor.
Briefing the media on Thursday, Mohammed Abubakar, governor of Bauchi state, explained that the decision is as a result of fluctuations in the landing cost of imported petroleum products.
He said: “The second issue that was discussed was the issue of the scarcity of petroleum product. The problem was addressed by the group managing director of the NNPC. The issue is of course caused by an interplay of the change rate of the naira and the dollar and the price of crude oil at the international market which affects the landing cost of refined products in Nigeria and in the process makes the operation of the current price regime almost impossible without some measure of nil return for whoever is in the process.
“As at today, most of the independent marketers have stopped importing refine products into Nigeria. It is only the NNPC that has been doing it. And the NNPC has been suffering a lot of setbacks, the highest amount of under recovery. By under recovery, it means the interplay between the landing cost of a litre of the PMS in Nigeria and the pimp price of that product. If the product lands at N170 for example and you sell at N145, immediately you know that you have an under-recovery of about N25 for each liter of fuel.
“So he submitted his report and the National Economic Council has a committee that has been interfacing with all revenue generating agencies of the federal government under the chairmanship of the governor of Gombe State. That committee has been charged with the responsibility of interfacing with NNPC with a view to determining the correct price for PMS considering the price of the product in especially countries that are bordering Nigeria. Because that is one of the reasons that encourage smuggling of the products to these areas.”
Nigeria last increased the pump price of petrol — from N86:50 to N145 — in May 2016.