… insists that it no longer fixes the price of fuel
By Michael Eboh
The Petroleum Products Price Regulatory Agency (PPPRA) on Sunday insisted that it would continue to regulate the downstream oil industry, regardless of the recent deregulation of the sector, to prevent marketers of petroleum products from exploiting consumers and also to enforce the appropriate laws that guide the industry.
The PPPRA also cleared the air about the controversy surrounding the price of petroleum products, stating that it no longer sets the price for Premium Motor Spirit (PMS), also known as gasoline, but would constantly, monthly, develop a guide price. . for the product, with which I would advise sellers.
In a statement in Abuja, PPPRA Executive Secretary Mr. Saidu Abdulkadir revealed that deregulation of the downstream sector would depend on the application of appropriate laws by strong regulatory agencies, hence his continued intervention.
He said: “For the sake of emphasis, let me reiterate that different sectors of politics operate under the guidance of national regulators. The Nigerian Central Bank (CBN) regulates banks and other financial sectors; The Nigerian Communication Commission (NCC) regulates telecommunications; The National Insurance Commission (NAICOM) regulates the insurance sector and the same exists for operators in the downstream oil sector of Nigeria.
“To this end, it is not out of place for the Agency to provide an indicative price band with the aim of protecting consumers against price increases. It is also important to affirm that deregulation does not exist anywhere in the world that means a total lack of control, supervision or supervision.
“While the market-based pricing regime is a policy introduced to free the market from all obstacles to investment and growth, it should not be misinterpreted as a total abdication of government responsibility to the sector and the citizenship”.
Abdulkadir argued that the PPPRA no longer sets prices, but provides a price guide band by monitoring the prices of petroleum products daily; using the average price of the previous month to determine the prices for the following month, for an appropriate price that reflects the costs and that guarantees reasonable returns for the Petroleum Marketing Companies (MAC).
“This methodology is in line with international best practices ranging from bi-monthly to monthly price reviews. Nigeria adopted the monthly review model considering the average duration for the importation of petroleum products to Nigeria from the nearest spot market; Northwest Europe (NWE) to West Africa (WAF) is about 30 days. This period covers the import financing process until delivery at retail points of sale ”, he explained.
He argued that the new pricing regime would encourage oil traders to resume the supply of PMS, leading to further value creation in the later phases; promotion of job creation; Ensure reasonable returns for investors, create healthy competition among sellers, enhance value for consumers, and make funds available for other important infrastructure.
Code of conduct for oil traders
However, the PPPRA Executive Director explained that although crude oil prices and prices of petroleum products are positively correct, prices of petroleum products do not increase or decrease in consequence of changes in the crude oil price.
He noted that the price of the pump that we hope to see will be a reflection of the international market prices for petroleum products that are also increasing.
Abdulkadir further stated that, in accordance with his laws, he had completed the development of Guidelines for the Commercial Framework for Petroleum Products and is currently preparing the Code of Conduct for Operators in the new price regime.
He also added that PPPRA is currently finalizing the review of cost elements and profit margins in the vendor pricing template, to reflect the current market-driven pricing regime that was last revised in 2016, as time that ensures that consumers are not overloaded.