Financial Energy Review
by Abisoye Shola…………
Oil marketers have expressed displeasure over the policy statement by the Petroleum Products Pricing Regulation Agency (PPPRA) particularly the section 3(2) of the memo issued Thursday by PPPRA insisting that the price of PMS advised by PPPRA shall be the guiding retail price at which the product shall be sold across the country.
The policy statement titled: Market Pricing Regime for Premium Spirit (PMS) using the Template of the Petroleum Products Pricing Regulation Agency (PPPRA) came immediately after an early morning Thursday Webinar hosted by Financial Energy Review had discussed the issue of the Downstream deregulation of the oil and gas sector.
The policy statement said that the price cap per litre in respect of PMS is removed from the commencement of these Regulation. It further stated that from the commencent of these Regulation a market based pricing regime for PMS shall take effect.
However, the Chairman of Major Oil Marketers Association of Nigeria (MOMAN) Mr. Tunji Oyebanji told Financial Energy Review that they are not satisfied with the section 3(2) of the memo that insisted that the price of PMS advised by PPPRA shall be the guiding retail price at which the product shall be sold across the country.
According to him, they are afraid that a simple statement from PPPRA on deregulation is insufficient and not enough to determine the dynamics of market prices of PMS. “The law setting up PPPRA is still in force authorising it to set prices. When prices start to go up, government will again come under pressure not to increase prices or set them at uncommercial levels” Oyebanji said.
When this happens he explains that private people will stop inporting and voila, “we are back to subsidies again with NNPC being the sole importer. If the prices are are determined by the market, reaction and changes will differ by marketer by location. There will be no big bang announcement for people to rally against. It is better to do this when prices are low” he said.
The MOMAN chairmam went further to say that all government needs to do is monitor against price gouging which it can to through a banker’s committee like meeting with the market associations with sanctions for recalcitrant ones. Of course there are also details like access to forex etc . LCCI needs to seek clarification on this from PPPRA.
In his own reaction Prof. Wumi Iledare, the Ghana National Petroleum Corporation (GNPC) Research Chair, UCC, Oil and Gas Institute, Ghana, said that PPPRA has no such power to fix prices of Petroleum products. According to him, PPPRA can only advise the government and not on its own fix prices of Petroleum products.
