The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says it would no longer fix or release templates for prices of Premium Motor Spirit, popularly called petrol, in the country.
The NMDPRA said it is the duty of the Nigerian National Petroleum Company Limited (NNPCL) to fix the prices of petrol imported and not take over the responsibilities of the Authority.
The Authority Chief Executive (ACE), Engr. Farouk Ahmed, made this known on Friday, June 2.
Ahmed said: “We put the regulation in place; we make sure quality control is complied with, we make sure the product is there and we give licence to a prospective importer. The market is now open for everybody that wants to import as far as they meet all the requirements. So, it is not about the NNPC alone.
“For everybody in the sector, we make sure we guide their operations whether at the depot or wherever the product is but we will not put a cap to say this is what the price must be. As far as we are concerned in the NMDPRA, this is not like before when the PPPRA fixes the price. In a deregulated market, it is the market force that dictates the price.
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“In the case of the NNPC, the organisation is the sole importer at this point. We told the NNPC to recover its costs because they know how much it cost them to import the product and sell it. Of course, we also know how much shipping, offshore, ex-depot, and ex-pump are. But we cannot tell them to sell at a price because the market is deregulated.”
Ahmed disclosed that the Federal Government has officially scrapped petroleum equalisation and the national transport allowance, adding that the NMDPRA and the Federal Competition and Consumer Protection Commission (FCCPC) would mount aggressive monitoring of activities in the downstream sector to prevent profiteering by petroleum marketers.
According to him, marketers were free to source their foreign exchange anywhere around the world to import petroleum products and recover their costs without impediments.
Though no template spells out the pricing components of petrol price, Ahmed hinted that the market would henceforth be modulated to allow the fluidity of prices.
“This means that the price will no longer be static. It will depend on the international price of the gasoline market. But this does not imply that marketers can sell at any price.
“If we find that certain prices are way above the expected profit margin, we and the FCCPC can move in to curb such excesses because that will be profiteering. The market structure will dictate the price swings at every point in time,” he added.
On how the Dangote Petroleum Refinery would assist Nigeria, the ACE said: “The refinery will give Nigeria easy access to petroleum products on-land for security reasons because it is within the Nigerian territory. Secondly, it will increase employment for our professionals.”
Ahmed, however, debunked the notion that petrol price would reduce with the refinery, saying: “I don’t think products will be cheaper because the company will be buying crude oil at the international price.
“However, it is going to be cheaper in terms of freight rate. Bringing of cargoes from Europe. Dangote refinery is a game changer in terms of accessibility. By the time the NNPC refineries and other modular refineries across the country come on stream, Nigeria will be a net exporter of petroleum products.”
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