The Federal Government has announced a ceiling of N1,350 per litre for the landing or ex gantry cost of Premium Motor Spirit, PMS, commonly known as petrol.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this on Thursday during a press briefing on petrol prices and subsidy related issues in Abuja.
Oyedele said the arrangement, described as price modulation, was designed to keep petrol prices stable and was neither a subsidy nor a 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 explained that under the proposed arrangement, refineries and importers would absorb any costs above the agreed ceiling and recover the difference at a later time.
He also announced plans for the forward sale of crude oil to domestic refineries as part of efforts to protect petrol prices from fluctuations in the international market.
According to him, the arrangement would enable refiners to plan their operations more effectively while providing greater certainty around petrol prices.
