Posted by By Obinna Ezeobi on
The Federal Government on Monday said the continuous fall of crude oil prices in the international market would not make it slash the price of petrol in the country.
The Federal Government on Monday said the continuous fall of crude oil prices in the international market would not make it slash the price of petrol in the country.
The Minister of State for Energy (Petroleum), Mr. Odein Ajumogobia, during an exclusive interview with our correspondent in Abuja on Monday, said since the market for Premium Motor Spirit (petrol) was regulated, a reduction in pump price should not be expected.
'We are reviewing the situation (falling crude oil prices). But the market for PMS is regulated at the moment hence the N70 per litre price. It is only in a deregulated market that the price will be reduced,' Ajumogobia said.
He spoke just as President Umaru Yar'Adua assured oil firms in the country that their interests would be considered in the ongoing reform of the oil sector.
A national daily (not The PUNCH) had on Monday reported that pump price of petrol might drop to N50 per litre following the crash of crude oil price to below $60 per barrel.
In June, when the price of crude oil surged towards $140 per barrel, the Federal Government, through Ajumogobia, hinted that it would review the pump price of petrol on January 1, 2009 upwards so as to reduce its subsidy burden.
The government had always justified petrol price increases on the fact that the high cost of crude oil prices at the international market made them imperative.
About 70 per cent of petrol consumed in Nigeria is imported.
Meanwhile, a top official of the Petroleum Products Pricing Regulatory Agency has dismissed claims that the landing cost of imported petroleum products had slid below N50 per litre.
'The price of petrol may never come to N50. What we are having now is about N3 subsidy per litre,' he said.
He therefore called for the reintroduction of petroleum tax if crude oil prices continued to slide.
The official, who spoke on the condition of anonymity, explained that the reintroduction of the tax would help the government shore up its resources.
Also on Monday, the Organisation of Petroleum Exporting Countries downplayed a possible cut in output on Monday after news of a recession in Japan stoked fears of weak global demand.
OPEC also published its monthly report on the oil market, with analysts expecting downward revisions to demand forecasts amid fears about the impact of the global financial crisis and a sharp global economic slowdown.
Brent North Sea crude for January delivery fell $1.13 to $53.11 per barrel on London‘s Inter-continental Exchange.
On the New York Mercantile Exchange, light sweet crude for December sank $1.34 to $55.70 a barrel.
Prices slumped last week to three-and-a-half-year lows close to $50, prompting the organisation to call an emergency meeting to discuss a mooted output reduction.
OPEC will meet on November 29 in Egypt even as some members called for another output cut to protect their incomes.
In Abuja, Yar'Adua said the interest of international oil firms would be taken into consideration as Nigeria reforms its oil sector.