The price of premium motor spirit (PMS) in Nigeria is likely to go further down in May 2020 with the 17.9 per cent reduction of ex-depot price from US$0.29 per litre to US$0.28 per litre by the Nigerian National Petroleum Corporation (NNPC)
The ex-depot price is the ceiling at which the depot owners buy fuel before selling to the marketers who sell directly to the consumer.
The depot owners, with their umbrella association the Petroleum Products Marketers Association of Nigeria (DAPMAN), occupy a strategic position in the fuel distribution chain as they store the fuel.
In March 2020, the Petroleum Product Pricing Regulatory Agency (PPPRA), the government agency responsible for petroleum products pricing, said that it had structured a template in which the price of PMS is determined on a monthly basis by the market forces depending on the international price of crude.
The Petroleum Products Marketing Company (PPMC), an agency of the NNPC responsible for transporting both crude and refined products in the country and which sells to the depot owners, said that the new ex-depot price reflects its market strategy of boosting its sales while complying with the PPPRA price template of providing affordable price to millions of fuel customers in the country.