Isaac Samuel
The Federal Government has proposed a N1,350 per litre ceiling on the ex-gantry or landing cost of petrol as part of a new price-modulation mechanism aimed at cushioning consumers against fluctuations in the international oil market.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday at a press briefing on petrol prices and subsidy-related issues in Abuja.
Oyedele said the proposed arrangement was designed to provide greater stability in petrol prices, stressing that it should not be interpreted as a return to fuel subsidy or price control.
He said, “We are introducing price modulation. The government is negotiating a ceiling of ₦1,350 per litre on the ex-gantry or landing cost of petrol to keep the price stable.
“When costs rise above the ceiling, refineries and importers will carry the shortfall and recover it later. This is neither a subsidy nor price control.”
Under the arrangement, refineries and importers would absorb costs above the agreed ceiling and recover the difference at a later period.
The minister announced plans for the forward sale of crude oil to domestic refineries, saying the measure would help protect petrol prices from volatility in the international market.
According to him, the arrangement would enable domestic refiners to plan their operations with greater certainty while helping to stabilise prices for consumers.
Oyedele said, “As production rises and previously committed crude is freed up, these will shield pump prices from volatility in the global markets.
“So the idea we have is an idea that is sustainable. You can sell your crude forward.
“We say to the refiners, for the next six months, we are selling you crude at $80 per barrel, for example. That preserves your budgets, provides certainty to the refiners and price stability to the consumer.”
