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. (source: Financial Energy Review). NNL.