The Group Managing Director of the NNPC, Dr. Maikanti Baru (right) receiving an award when he visited Benue State Governor, Samuel Ortom in Makurdi last week, also on the agenda were Benue Trough exploration & biofuels project
About three months after the Nigerian National Petroleum Corporation (NNPC) crashed the price of Automotive Gas Oil (AGO) also known as diesel by 42 per cent, from an all-time high of N300 per litre in January 2017 to N160 per litre in July, fresh indications have emerged that marketers are back to selling diesel at between N210 and N225 per litre across the country.
Shipping Position Daily learnt that the ex-depot price of diesel, which dropped to between N135 and N155 per litre in July, when the NNPC cut the price of the product, have risen considerably to as high as N184 per litre.
It was gathered that many outlets owned by the independent and major marketers have adjusted their pump price to between N210 and N225 per litre. However, a few outlets, including those owned by the NNPC, are selling diesel below N200 per litre.
A visit to some filling stations in Egbeda, Ikeja, Apapa and other areas within the Lagos metropolis by our correspondent showed that the price of diesel has shot up to over N200 per litre from N160; the price it was reduced to in July, in line with its strategic intervention programme of easing the burden of high cost of the product on consumers.
Marketers, who spoke with our correspondent, said the rise in the price of diesel was not surprising as the price of the product has been deregulated over the years. So, the price is determined by market forces of demand and supply, they said, adding that such developments are expected in a deregulated market.
NNPC spokesman Mr. Ndu Ughamadu attributed the increase to deregulation of that segment of the downstream sub-sector years back.
Ughamadu said that the deregulation resulted in the differential prices of petrol, diesel and kerosene, adding that the idea has paved way for what he described as free entry and free exit market regime in the sector.
He said the NNPC was not surprised by the turn of events in the sector in view of the decision by the Federal Government to deregulate the industry.
Ughamadu said: “NNPC was definitive in its statement that the market is influenced by the forces of supply and demand, and that the intervention was meant to ease the burdens of high cost of diesel on the consumers. The intervention is subject to the dynamics of demand and supply. When the demand for diesel is high, the price of the product will also be high. Conversely, when the demand is low, the price will also be low.”
The Federal Government in June 2016, increased fuel prices across boards. To reduce the burdens on the users, the NNPC strategically intervened by reducing the price of diesel from N300 per litre to N160 per litre in July through flooding the market with the product.
Part of the interventions include improving supply of diesel, remodeling of the product distribution to address sufficiency issue, and working hard with relevant stakeholders to improve distribution from refinery depots, by implementing a robust loading programme.
The NNPC also partnered stakeholders such as the major Oil Marketers Association of Nigeria (MOMAN), the Nigerian Association of Road Transport Owners (NARTO), Petroleum Tanker Drivers (PTD) and the Independent Petroleum Marketers to improve fuel supply.
Other efforts included the resuscitation of critical pipelines and depots in places such as Atlas Cove-Mosinmi, Port Harcourt Refinery, Kaduna Refinery, and the ongoing plans to revamp and commission other major pipelines across the country.