The Petroleum Product Pricing Regulatory Agency(PPPRA) has announced a sharp cut in the Expected Open Market Price (EOMP) of petroleum and crude oil.
Following the Slash in the pump price of petrol to 125 per litre by the Nigeria National Petroleum Commission(NNPC), the petroleum agency signaled a drop in it Open Market price.
A statement by the agency said, the move was in line with the government directives to reduce the retail price of Petro to 125. PPPRA would continue to monitor trends in market fundamentals and announce a monthly Guiding/Expected Open Market price at the beginning of every month, effective 1st April, 2020.
The statement reads: “The recent plunge in the price of crude oil and petroleum products occasioned by the outbreak of Coronavirus pandemic and slowing global oil demand, has led to a drop in the PMS Expected Open Market Price (EOMP) below the approved pump price cap of N145.00 per litre, indicating over 30 per cent drop below the official pump price. However, the average EOMP for the months of January and February 2020 were N175.52 per litre and N156.02 per litre respectively.
“Consequent on the new NNPC Ex-Coastal price and taking into consideration all existing approved margins on the PPPRA pricing template, the new pump price of PMS is N125.00 per litre, effective 19th March, 2020. This new price will guide PMS pricing in Nigeria for the rest of the month of March, 2020.
“It is expected that the new price regime will emplace a more transparent pricing model, stimulate investment growth in the downstream sector and encourage resumption of products importation by Oil Marketing Companies (OMC), translating to more job creation as many depots and facilities that are presently dormant will now become active.
The directive of Government to the NNPC to reduce the Ex-Coastal price of PMS, despite the fact that the current stock of product was imported during the months of January and February, 2020 is highly commendable, although this action is not without costs to the Corporation.”
Since the outbreak of Covid-19, the international oil price has continued to decline. From over $50 a barrel over a month ago to about $30 a barrel. The price dropped further to $28 per barrel on Wednesday.
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