We’ll Continue to Guide Price of Petrol, Says PPPRA

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•Marketers fault FG on fuel costing

Emmanuel Addeh in Abuja and Peter Uzoho in Lagos

The Petroleum Products Pricing Regulatory Agency (PPPRA) yesterday denied that it approved the full deregulation of fuel prices, which will subject the cost to market forces.

Executive Secretary of the agency, Mr Abdulkadir Saidu, in a statement in Abuja, said contrary to reports, the PPPRA would continue to provide ‘guiding prices’.

PPPRA ‘s statement was to clarify the one issued last Thursday in which Saidu announced the deregulation of petrol pricing.

In the last Thursday’s statement, backdated to March, the agency had said the federal government had begun the full deregulation of the downstream petroleum sector with the removal of the existing cap on petrol price.

It urged marketers to import and sell the product according to the dynamics of the forces of demand and supply.

Saidu, in the statement, had noted that the agency would only continue to monitor trends in the crude oil market and advise the Nigerian National Petroleum Corporation (NNPC) and oil marketers accordingly.

Reacting to the PPPRA ‘s earlier position on petrol pricing, fuel marketers, at the weekend, said it contradicted the federal government’s claim that it had deregulated the pricing of petrol.

However, in its latest statement on the issue, Saidu said the agency had not given marketers the freedom to fix the price of the commodity and sell above the stipulated price.

He described the claim as a misconception, adding that the removal of petrol price cap and implementation of a market-based pricing regime was first announced by the Minister of State for Petroleum, Mr Timipre Sylva.

He added that this was followed by PPPRA’s publication announcing the regulation on the market-based pricing regime, thus creating a legal framework for the policy.

He said: “The published regulation does not confer on marketers the power to fix prices for the product as they deem fit, but rather guiding prices would be advised by the PPPRA according to market realities.

“The agency shall monitor market trends and advise the NNPC and oil marketing companies on the monthly market-based guiding price, which shall include the indicative retail price at which the product shall be sold across the country.”

He added that the federal government had earlier said it would continue to monitor the price of petrol and advise on monthly guiding prices.

Saidu said the guiding prices would guarantee reasonable returns to operators while ensuring consumers pay appropriate price in line with market reality.

“For the avoidance of doubt, it is instructive to state that no private individual or group has the mandate to fix prices of petroleum products. However, the statutory regulatory body is saddled with the responsibility of advising guiding prices,” he stated.

Marketers Fault FG on Fuel pricing

Fuel marketers have faulted the federal government’s claim that it has deregulated the price of petrol.
According to them, a proper study of PPPRA’s policy document showed that the federal government still retains the power to fix petrol price.

Marketers under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) told THISDAY at the weekend that the PPPRA should explain certain clauses in the document signed by Saidu, describing it as contradictory.

The Chairman of MOMAN, Mr. Tunji Oyebanji, told THISDAY that clause 3(2) of the PPPRA statement, which stated that “the agency shall monitor market trends and advise the NNPC and oil marketing companies on the monthly guiding market-based price,” contradicted all principles of market forces.

Oyebanji added that the marketers were surprised by the sudden decision and pronouncement, stating that as operators, they ought to have been carried along to enable them to make some inputs, as being done in other sectors.

He said: “There is contradiction in that thing (document). For me, I’m a bit confused. You see, if this was banking, financial institutions, CBN would call all the bank MDs; they would do their bankers’ meeting and at the end of it there would be a communiqué and all that. Now you have all these operators, just as you woke up to see this pronouncement, that’s how we woke up to see it.

“So, I think it was a reaction to all these noise we have been making and in order to quench that fire, that’s why this thing came up. It looks contradictory to me. You can’t say you have fully deregulated and that market forces will prevail and at the same time you say you are the one who will advise on monthly petrol price. And the thing says ‘you shall’, which means if you don’t do it you are in trouble.

So, what are we talking about?”

He also wondered if the backdating of the policy to March would mean that marketers’ losses from March till date, as a result of the reduction of the former petrol pump price from N145 to the current price of N121.50, would be refunded to them.

Allaying fears that marketers might take advantage of the masses when the market was fully deregulated and market forces allowed to determine petrol price, Oyebanji urged the federal government to set up an agency to monitor prices to guard against malpractices.

“They will be there as monitor just like NCC and CBN do to telecom companies and banks respectively, and they penalise them whenever they notice malpractice by the operators. Likewise, that is what the monitoring agency will be doing. When they circulate the landing price of fuel and say it should be N100 but some people are charging N200, that is exorbitant.

“So, the monitoring agency will call the person and say, ‘come, this your price is too much, reduce it’.

If they tell them and they don’t listen, then they can bill them N500 million fine and with that nobody will do it again. That’s what it should be,” he stated.