So there were reports that the federal government had concluded plans to increase the pump price of fuel from N87 to N97 in 2016. In fact, the Nigeria Labour Congress (NLC) has begun to threaten the government and warning against the decision.
The minister of State for Petroleum Resources, Ibe Kachikwu, has now explained that that’s not the kind of increase the government is looking at. For sure, he says, there may be some increases next year, but the price has not been fixed yet.
So what’s the plan? Kachikwu wants pump price increases and decreases to be less arbitrary and more based on science and real calculations based on the prevailing price of oil in the international market. However, there will be a cap of N97. That’s like the maximum it would rise. In other words, the price would increase or decrease across the N87 (where it is now) to N97 band.
Currently, Kachikwu says the price of oil at the international market is approximately N87, which is the price we sell it. “So,” he says, “there is no need to change the price at the pump.’’
What happens in the future if oil prices rise at the international market? Kachikwu says the Petroleum Products Pricing Regulatory Authority, PPPRA, which is the government agency responsible for regulating the petroleum products prices in the country, would be looking at it every quarter. If it rises, the agency will calculate and announce what the price will be. And this starts from January.
The Minister however does not “anticipate any major price shift in January, because of the price of crude oil today.”