The Federal Government has pegged price of Premium Motor Spirit, PMS, otherwise known as petrol to N1,350 per litre.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, made the announcement on Thursday during press briefing on petrol prices and subsidy-related issues in Abuja.
According to him, arrangement was designed to keep petrol prices stable, stressing that it was neither subsidy nor form of price control.
“We are introducing price modulation. The government is negotiating a ceiling of N1,350 per litre on the ex-gantry or landing cost of petrol to keep the price stable.
“When costs rise above the ceiling, refineries and importers will carry the shortfall and recover it later. This is neither a subsidy nor price control,” he said.
Oyedele further revealed that under proposed arrangement, refineries and importers would absorb any costs above agreed ceiling and recover difference later.
He equally announced plans for forward sale of crude oil to domestic refineries as part of efforts to shield petrol prices from volatility in international market.
According to him, arrangement would allow refiners to plan their operations and provide greater certainty over prices.
“As production rises and previously committed crude is freed up, these will shield pump prices from volatility in the global markets.
“So the idea we have is an idea that is sustainable. You can sell your crude forward.
“We say to the refiners, for the next six months, we are selling you crude at $80 per barrel, for example. That preserves your budgets, provides certainty to the refiners and price stability to the consumer,” Oyedele said.
