Oyebanji, who is the managing director/chief executive officer of 11Plc (formerly Mobil Oil Nigeria Plc), said this on Tuesday on CNBC Africa.
Petrol price was increased by marketers to between N148 and N150/litre in August, as the Petroleum Products Pricing Regulatory Agency remained silent as regards the guiding retail price for the month.
Following the sharp drop in crude oil prices which led to the reduction in the pump price of petrol in March, the PPPRA had said it would advise the Nigerian National Petroleum Corporation and oil marketing companies on the monthly guiding retail price at which the product shall be sold across the country.
Oyebanji said the under-recovery of N5.35bn recorded by the NNPC in June had to do with the inventory losses that would have occurred because of the reduction in prices at the time.
He said, “However, going forward, we still note that there is still an element of subsidy because when you look at the prices that were posted for the month of August, for instance, NNPC is still retailing petrol at N145 when really the price should be closer to N155.
“If you look at the template the PPPRA has been using in setting prices, you will find that if you just apply even the official exchange rate and Platts for the month of August, prices at the pump should be significantly higher than where there are today.
“Obviously, something is not clear as to what really is happening. We suspect that there may be some issues to do with how margins are being applied to the various operators and the various subheadings within the template.
“So, we will continue to work with government to try and get clarification on this subject but definitely, it is very clear that there is still an element of subsidy.”
Oyebanji said the marketers would continue to engage the relevant agencies of government, particularly the PPPRA, to get an increase in their margins.
He said, “The margins were changed in 2008; then they were not touched for another eight years, and we are trying to get an improvement of that because that will directly impact our bottom line.
“However, we believe that when subsidies are removed, and you allow for price liberalisation, which means that the market will fix prices at the pump, then that will allow full cost recovery by all the operators, and with that, it means that more investments will be attracted to the industry at all levels of the value chain.
“If that happens, then that means more employment, growing the economy, and ultimately, Nigerian can become a refinery hub for West Africa and Central Africa and earn more foreign exchange.”
Oyebanji urged the government to move beyond subsidy removal and to full liberalisation.