FG proposes N1,350 ceiling on petrol supply cost, not filling-station price

The Federal Government is negotiating a N1,350-per-litre ceiling on the ex-gantry or landing cost of petrol, rather than a fixed price at filling stations.

Finance Minister Taiwo Oyedele announced the proposal at a briefing in Abuja on Thursday. He said it was intended to reduce sharp changes in petrol prices caused by movements in global crude prices and the exchange rate.

The ceiling would apply to the cost of petrol leaving a refinery or arriving through imports. Under the proposed arrangement, refiners and importers would initially absorb costs above the ceiling and recover the difference later when market conditions allow.

Oyedele described the arrangement as price modulation, saying it was neither a subsidy nor price control. Channels Television reported that the ceiling would be reviewed monthly and the figures published.

The minister also outlined plans to sell crude oil forward to domestic refineries so they could plan around agreed supply prices. Punch quoted him using a six-month crude sale at $80 a barrel as an example; he did not announce that figure as an agreed contract price.

The proposal forms part of the package that includes a 30-day discount on petrol sold by NNPC, with priority for public transporters. NaijaTrend reported that announcement here. Oyedele said the discounted petrol would be sold at cost.

Sources: Punch, Channels Television