Nigerians have received a New Year present from the federal government as the price of petrol has been reduced with effect from January 1, 2016.
Petrol will be sold at N86 per litre by the Nigerian National Petroleum Corporation (NNPC) retail stations, while other oil marketers will sell at N86.50 per litre as against the present N87 per litre, Vanguard reports.
The NNPC will sell at a lower price than other oil marketers because it is cheaper for it to import, compared to the independent and major oil marketers.
This was disclosed yesterday, December 29, to newsmen in Abuja by Farouk Ahmed, the executive secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA).
He said explained that the petrol price reduction was due to an implementation of the revised components of the Petroleum Products Pricing Template for PMS and household kerosene.
According to him, the revised pricing template which will be reviewed quarterly is geared towards ensuring an efficient and market-driven price that will reflect current realities.
He said the pricing template will soon be presented to oil marketers.
Ahmed said: “Since 2007, while crude oil price had been moving up and down, the template remained the same. This had made it necessary for us to introduce a mechanism whereby the template would be sensitive to the price of crude oil.
“However, the template is not static, as there would be a quarterly review and if there is any major shift, the Minister of State for Petroleum Resources would be expected to call for a review, either upward or downward, depending on the market condition.
“If there is no major shift, that is, if there is a marginal change, the price would continue from January to March, 2016. In addition, there would be a Product Pricing Advisory Committee that would be set up to advise the PPPRA concerning movements in the price of crude oil.”
Ahmed warned that any marketer found selling above the PPPRA approved price will be sanctioned appropriately, adding that, “These include, but not limited to, exclusion from future participation in product importation and revocation of licences.”
Emmanuel Ibe Kachikwu, the minister of state for petroleum resources and group managing director of the NNPC had earlier disclosed that the pump price of petrol will be reduced to N85 per litre from January 1 next year.