Stakeholders and marketers of petroleum have hailed the Federal Government after the price of premium motor spirit (PMS) berthed at N160.
A groundswell of support among Petroleum Industry players and stakeholders is building around the bold decision by the Federal Government to abolish the subsidy regime and enthrone a downstream deregulation era leading to the prevailing cost-reflective price of N160 per litre of petrol.
Speaking on Thursday, chairman of the Major Oil Marketers Association of Nigeria (MOMAN) Adetunji Oyebanji, said the association welcomed government’s action in allowing the market to determine prices, noting that this would prevent the return of subsidies while allowing operators the opportunity to recover their costs. He said this will, in the long run, encourage investment and create jobs.
Oyebanji further explained that, though prices at the pump would need to be adjusted to reflect realities of the increase of ex-depot prices by the Petroleum Product Marketing Company (PPMC), the magnitude of the increase, timing and location would be determined by each individual company.
“Consistent with global best practices, MOMAN does not dictate prices to its members, as this would be anti-competition in a fully deregulated market,” Oyebanji explained.
He, however, called on the Ministry of Petroleum Resources to intensify its public awareness drive to educate the populace on the current realities.
“The Ministry of Petroleum Resources should also be telling Nigerians that we can no longer afford subsidy. If we keep it, the investment in infrastructure, health, education, etc., will not be possible. We are borrowing so much to finance our budget. We spent over a trillion naira on subsidy last year. It is unsustainable’’, he said.
MOMAN’s position was re-echoed by another stakeholder, the Director at NIPCO Plc and Chairman of SY Petroleum Limited, Alhaji Sani Yau, who emphasised that the price increase was reflective of trending realities in the sector, noting that “deregulation will foster an eventual price reduction in the nearest future when other market fundamentals would converge to create the desired competitive market space”.
An independent marketer, John Agidigan, explained that before this increase, market forces had forced the price per litre down to N121, then up to N131 and later N148. He explained that under a deregulated environment, prices are expected to rise and fall in response to the volatility of demand and supply.
According to him, the new deregulated regime would always ensure the availability of the product in the market at affordable price, based on the supply, adding that this regime was better than what obtained in the past when Nigerians had to contend with extreme scarcity and its attendant challenges such as long queues at fuel stations.
An oil analyst, Dr Mac Udiewe, said the price of fuel would surely go down in a few months’ time when supply of the product would increase geometrically with the entrance of products from private refineries such as the Dangote Refinery and other modular refineries.
Other stakeholders who responded were unanimous in their conclusion that deregulation would ultimately favour consumers, as soon as the industry stabilises and prices begin a downward trend.
