Meanwhile, with effect from today, the pump price for petrol will drop to N125 under a new fuel pricing regime approved yesterday by President Muhammadu Buhari in the wake of the volatility in crude oil price occasioned by the twin factors of COVID-19 pandemic and price war between Saudi Arabia and Russia.

As at yesterday, the pump price of petrol was N145 per litre, a price regime that came into effect from May 11, 2016.

By the move, the federal government has completely deregulated the price of petrol because, with the slump in crude oil price, the NNPC is faced with price over-recovery and no longer under-recovery.

The chief executive officer of one of the leading oil marketing companies in the country explained that with the development, oil marketers would also adjust their pump price down to the N125 per litre that has been announced.

According to him, because of the situation as well as the scarcity of forex in the country, oil marketers would now have to be depending on the NNPC for the supply of petrol.

“Right now, NNPC will be the sole importer because there is a shortage of forex. No oil marketer will be willing to use scarce dollars to import petrol that would be sold in naira and when you exhaust the product, you will now be faced with the difficulty of getting dollars,” the source who pleaded to remain anonymous said.

To ensure that the price always responds to any development in the oil sector, the president also directed the Petroleum Products Pricing and Regulatory Agency (PPPRA) to modulate pricing in accordance with prevailing market dynamics and further oil market development.

However, following the reduction of the pump price to reflect the drop in the international market price of crude oil, the marketers of petrol have called for higher margins on imported product.

The presidential approval, which was given at the weekly Federal Executive Council (FEC) meeting in Abuja followed the presentation made by the Minister of State for Petroleum, Chief Timipre Sylva.

Sylva had last Friday told State House reporters that the committee set up by the president to review the state of the economy following the drastic fall in the price of crude oil in the international market was still consulting on the possible reduction of fuel price.

The price of crude oil has been hovering between $24 and $28 in recent times following the outbreak of COVID-19 and the oil war between Russia and Saudi Arabia.

This led to a drastic drop in the price of refined products, automatically knocking off the subsidy elements in the pricing regime.

A statement wednesday by Sylva said the federal government had directed the National Petroleum Corporation (NNPC) to reduce “Ex-coastal and ex-depot prices of PMS to reflect current market realities.”

The statement, which did not indicate the price, said the NNPC would henceforth issue a monthly guide on what he described as the appropriate pricing regime.

Sylva, who said the reduction would rejuvenate the economy and bring relief to Nigerians, added that the PPPRA would also provide a framework for a sustainable fuel supply.

He added that the Petroleum Ministry would continue to encourage the use of natural gas as an alternative to fuel consumption.

The statement said: “The drop in crude oil prices has lowered the expected open market price of imported petrol below the official pump price of N145 per liter.

“Therefore, Mr. President has approved that Nigerians should benefit from the reduction in the price of PMS, which is a direct effect of the crash in global crude oil prices.

“In view of this situation, based on the price modulation template approved in 2015, the federal government is directing the Nigerian National Petroleum Corporation (NNPC), to reduce the ex-coastal and ex-depot prices of PMS to reflect current market realities.

“Also, the PPPRA shall subsequently issue a monthly guide to NNPC and marketers on the appropriate pricing regime. The agency is further directed to modulate pricing in accordance with prevailing market dynamics and respond appropriately to any further oil market development.

“It is believed that this measure will have a salutary effect on the economy, provide relief to Nigerians and would provide a framework for a sustainable supply of PMS to our country. The Ministry of Petroleum Resources will continue to encourage the use of compressed natural gas to complement PMS utilisation as a transport fuel.”

Following the minister’s directive, the NNPC yesterday reviewed its ex-coastal, ex-depot and retail pump prices accordingly.

“Effective March 19, 2020, NNPC’s ex-coastal price for PMS (petrol) has been reviewed downwards from N117.6 per litre to N99.44 per litre while the ex-depot price is reduced from N133.28 per litre to N113.28 per litre.

These reductions will, therefore, translate to N125/litre retail pump price,” Group Managing Director of NNPC, Mr. Mele Kyari, said in a statement.

He said despite the obvious cost implication of the immediate adjustment to the corporation, NNPC was delighted to effect the massive reduction of N20 per litre for the benefit of all Nigerians.

“Accordingly, all NNPC retail stations nationwide have been directed to change the retail pump price to N125 per litre,” he added.