Following removal of fuel subsidy on premium motor spirit (PMS) otherwise called petrol, the Petroleum Products Marketing Company (PPMC) has announced reduction in the ex-depot price for petrol and automotive gas oil (AGO), otherwise called diesel.
The new ex-depot price for petrol is now N108 per litre for the month of May while ex-depot price for diesel is now N164 per litre for same month.
In a memo to oil marketers and other stakeholders in the petroleum marketing business, dated May 5, 2020, titled: ‘Re: PPMC Petroleum Products Prices for May 2020,’ the PPMC reduced the ex-depot price for diesel to N164 per litre for depots in Lagos and N166 per litre for depots in Oghara, Calabar, Port Harcourt, among others.
The PPMC said in the memo that the new prices would take effect from May 5, 2020.
Confirming the new price change, the spokesman of NNPC, Dr. Kenny Obateru, stated that the price change for petrol from N113.28 per litre to N108 per litre is a marketing strategy to make more sales while complying with the PPPRA price template.
“We reviewed the ex-depot price to enable us make more sales. For AGO, it is a deregulated product and as such is its prices are determined by market forces,” he said.
The ex-depot price is the price at which the depot owners sell the commodity to retail outlets across the country. Though, the PPMC did not state the Expected Open Market Price of the commodity, which is the pump price of the price, but over the years, the difference between the ex-depot price and the pump price of petrol is usually around N9 per litre.
This means that at an ex-depot price of N108 per litre, the pump price of PMS should be around N115 per litre, N10 lower than the current highest price band of N125 per litre.
The current retail price of petrol is N123.50 per litre at NNPC Retail outlets and N125 per litre at private petrol stations, while diesel is sold around N200 per litre.
It would be recalled that the NNPC GMD, Mallam Mele Kyari, had announced that era of fuel subsidy is gone forever.