News
The Petroleum
Products Pricing Regulatory Agency (PPPRA) has said that oil marketing
companies are now importing Premium Motor Spirit (PMS), known as petrol and
have imported a total of 536,000 metric tonnes of the product into the country.
This statement
from PPPRA is not unconnected to the recent price hike of the product from N125
per litre to N143 per litre which oil marketers admitted had marginally reduced
their cost of importing and distribution to outlets nationwide.
Industry experts
said that what PPPRA did not explained is how the oil marketers have so far
sourced their foreign exchange and at what rate to have enabled them resume
importation of the products giving that Forex has always been a major challenge
to the marketers.
However, industry
experts pointed out that this explanation may have to come from the oil
marketers who had maintained that importing PMS at the current Forex rate at
the parrel market is near impossible.
Meanwhile PPPRA
maintained that full deregulation of the downstream oil and gas sector will
help force down price of Premium Motor Spirit (PMS) otherwise called petrol.
In a statement
signed by its Executive Secretary, Mr Saidu Abdulkadir in Abuja, on Sunday,
PPPRA attributed the rise in the pump price of the commodity to cost of
petroleum products in the international market and the cost of acquiring
foreign exchange (FOREX).
Abdulkadir
explained that the newly-adopted market-based pricing system was in view of the
need to promote the growth of the Nigerian petroleum industry and the economy
in general.
According to him,
additional investment in local refining, will engender competition and force
down prices of products.
The agency is
cognizant of the public outcry trailing the recent surge in petroleum products
prices.
“However, this
decision is a reflection of the new market-based pricing system, which does not
seek to harm consumers but foster growth in the sector and prevent wastages
resulting from subsidy.
“The recent
upward movement in pump price is becoming a bone of contention because of the
fragile state of the economy.
“However,
deregulation of the sector is in the country’s best interest because
competition has a way of forcing down prices and ensuring that companies place
a tight rein on production cost such that wastes that could be passed on to
consumers in form of high prices are eliminated.
“The trillions of
naira that would have been spent subsidising PMS could be injected into other
key sectors such as agriculture, education, health, power and infrastructure.
“There will also
be focus on the provision of social safety nets for the poor who bear the brunt
of the COVID-19 pandemic,” he said.
Abdulkadir said
that under the market-based pricing regime, products prices would be determined
by market forces.
He said that this
explained the recent downward and upward movements in the guiding pump price
band of PMS, which reflected market realities.
The agency had
announced the July pump price of petrol to be between N140.80 and N143.80
Credit financialenergyreview.com
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