The Petroleum Products Pricing Regulatory Agency (PPPRA) has said that the price of petrol in Nigeria is now fully deregulated and that the agency will no longer fix prices.
PPPRA Executive Secretary Saidu Abdulkadir made this statement over the weekend. He also said the agency would monthly develop a guiding price for the commodity, with which it would advise marketers.
“For the purpose of emphasis, let me reiterate that different sectors of the polity operate under the guidance of national regulators.
“The Central Bank of Nigeria (CBN) regulates the banks and the financial sector; Nigerian Communication Commission (NCC) regulates telecommunications; National Insurance Commission (NAICOM) regulates the insurance sector and the same exists for operators in Nigeria’s downstream petroleum sector.
“To this end, it is not out of place for the Agency to provide a guiding price band with the aim to protect consumers against price gouging.
“It is important to also state that there is nowhere in the world that deregulation means total lack of control, supervision or oversight.
“While the Market-Based Pricing Regime is a policy introduced to free the market of all encumbrances to investment and growth, it should not be misconstrued to mean a total abdication of government’s responsibility to the sector and citizenry.”
The PPPRA Executive Secretary also explained that the average price of the previous month is used to determine prices for the following month, for appropriate cost-reflective pricing that ensures reasonable returns to Oil Marketing Companies (OMCs).
“This methodology is in line with international best practices which range from bi-monthly to monthly price reviews.
“Nigeria adopted the monthly review model considering the average duration for the importation of petroleum products into Nigeria from the closest spot market; North West Europe (NWE) to West Africa (WAF) is about 30 days.
“This period encompasses the Import Financing Process to delivery at retail outlets,” he said.