PETROL: NO MORE PRICE BAND, MARKETERS CAN FIX PRICES- FG
The Federal Government has said that major and independent marketers are free to fix the pump price of the Premium Motor Spirit (PMS) known as petrol.
Abdulkadir Saidu, Executive Secretary of Petroleum Products Pricing Regulatory Agency (PPPRA) disclosed this during a press briefing in Abuja, on Tuesday, September 9, noting that the Government would no longer issue price-fixing guidelines for the sale of petrol at filling stations.
On March 19, 2020, the Government, through the PPPRA, started what it called a petrol pricing regime, whereby it releases bands showing upper and lower limits for the pump price of petrol monthly.
It released petrol price bands for about three months although some operators faulted the decision as they claimed it did not speak well of a deregulated downstream oil sector.
Noting that the downstream arm of the oil and gas sector had been fully deregulated with this development, Saidu said the price of petrol would be driven by the forces of demand and supply and the international cost of crude oil.
Saidu, who was represented by Victor Shidok, the General Manager, Administration, and Human Resources of the PPPRA, said, owing to the difficulties in accessing foreign exchange by oil marketers, the PPMC is currently the sole importer of the commodity, and announces the prices at which it sells the commodity to oil marketers.
According to him, every petrol dealer is free to source for product and fix their price.
“You know the role that foreign exchange plays with the sourcing of PMS. When you are not producing and earning foreign exchange as you ought to do, then there would be pressure on the little that you have. That is why you see the galloping foreign exchange,” he said.
“We did not expect it would remain like that forever; that is why the government is doing all it can and in the near future, we would begin to see an improvement in the value of the naira.”
“Secondly, we believe marketers are still studying the market before they come in fully to resume fuel import. There is also scepticism whenever a new policy is being put up. We do not envisage that the exchange rate would remain at the rate at which it currently is.”
He however said the pricing must be in accordance with the agency’s code of conduct to avoid marketers from excesses inflation of prices to consumers.
“This, however, must be in accordance with our code of conduct because as a regulator, it is our duty to protect the consumer and operators must abide by our codes,” Saidu stated.
This is coming after Pipelines and Product Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation, (NNPC) increased pump price from N148 to N151.56 per litre.
Read Also: PETROL PRICE NOW N151.56K PER LITRE - PPMC
Meanwhile, Atiku Abubakar, a former Vice President, has condemned the upward review of pump price when it had claimed to have deregulated the downstream sector.
“I am a businessman. I look at things from an economic perspective. Questions beg answers. The price of crude is down from where it was in 2019. In the US and Europe, fuel prices are far lower than they were in 2019. If we truly deregulated, shouldn’t fuel price have dropped?” he tweeted.
Some other relevant organizations and groups have also reacted to the sudden spike in fuel price amid the coronavirus pandemic.
NLC among others rejected the increment in the pump price of petrol, saying it is “like adding insult to injury.”
Also, the Advocacy for Integrity and Economic Development (AIED) had also faulted President Muhammadu Buhari’s led administration over the hike in electricity tariff and pump price of petrol, describing the Government as heartless and anti-people, Eons Intelligence reports.
However, the Nigerian Economic Summit Group (NESG) has commended the Federal Government on its bold move to deregulate the petroleum pump price and electricity tariffs.
In a statement jointly signed by the Chairman, Board of Directors, Mr Asue Ighodalo and CEO, Mr Laoye Jaiyeola, on Monday, September 7th, 2020, it said that the move by the Government would lead to a better functionality of the electricity and petroleum markets.
Part of the statement released reads; “The NESG commends Government’s actions at deregulating fuel and electricity prices and urge that proper policies, processes and procedures be put in place, to ensure that all the reforms (beyond price deregulation) necessary to facilitate the smooth functioning of both the fuel and electricity markets are effectively and conclusively implemented.”
In March, the Federal Government announced the removal of cap prices for petrol. Saidu via a memo disclosed that the agency would only provide monthly guiding price for the commodity.
“The price cap per litre in respect of Premium Motor Spirit (PMS) is removed from the commencement of these Regulations. From the commencement of these Regulations, a market-based pricing regime for PMS shall take effect,” he said.