Could fuel prices go up after NPA restored 9 pesewas on UPPF margin?

Fuel prices expected to rise in coming days

NPA restores UPPF margin to 29 pesewas

Fuel price increases always impact transport fares

Prices of fuel could go up this week after the National Petroleum Authority (NPA) announced the restoration of one of the margins on petroleum products.

The NPA in a statement late last week said it was reinstating the Unified Petroleum Price Fund (UPPF) margin to 29 pesewas, three months after taking 9 pesewas off the margin.

A June 30, 2022 statement to industry players said the restoration was to take effect from Friday, July 1, 2022. The restoration according to the NPA, follows the expiration of the downward review.

“We hereby wish to inform you that, following the expiration of the period for the reduction of the margins as mentioned in the letter above, the UPPF Margin is being restored to its actual amount effective 1st July, 2022.

"The restoration of the UPPF Margin has become necessary to ensure that the Fund is able to sufficiently pay the freight cost for transporting petroleum products to retail outlets,” the NPA said.

The decision is likely to trigger increase in fuel prices and attendant increase in transport fares. Fuel prices have been volatile since beginning of this year, which situation is said to have impacted on the general cost of living.

Consequently, the UPPF margin on both diesel and petrol now stands at 29 pesewas each.

The margin on kerosene and LPG will now increase from 21 pesewas and 18 pesewas to 30 pesewas and 27 pesewas respectively.