The Petroleum Products Pricing Regulatory Agency (PPPRA) has made a U-turn on its decision to allow marketers to fix petroleum products prices as indicated by market forces. The Regulatory Agency had a few days ago published a document containing the government’s decision to partially deregulate the downstream sector.
On Saturday, the PPPRA said it would not allow petroleum products marketers to fix prices, although its role will be to advise and recommend prices that will serve as a guide to marketers.
The statement signed by the Executive Secretary of PPPRA, Abdulkadir Saidu, confirmed that the Nigerian government has deregulated the market, but added that it does not excuse the role of the Agency as the Regulator.
“Suffice to say that in a deregulated market, the role of a Regulator in monitoring and regulating activities in the sector cannot be over-emphasized,” he said.
He added that the ‘Market-Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020,’ published on June 4, does not empower marketers to fix prices. He said that marketers should rely on the guidance of the Agency that will keep monitoring the market realities and offer advice based on the facts.
Abdulkadir said that the PPPRA will monitor market trends and advise the Nigerian National Petroleum Corporation (NNPC), and marketers on the monthly market-based guiding price, and will determine the retail price at which petroleum products shall be sold nationwide.
He said, “It would be recalled that the removal of Premium Motor Spirit (PMS) price cap and implementation of a market-based pricing regime was first announced by the Honorable Minister of State for Petroleum Resources, Chief Timipre Sylva, in March 2020. This was followed by PPPRA’s publication announcing the Regulation on the market-based pricing regime, thus creating a legal framework for the policy.
“The Honorable Minister had earlier stated that the Federal Government will continue to monitor the price of petroleum products and advice on monthly guiding prices that guarantee reasonable returns to operators while ensuring consumers pay appropriate prices in line with market reality and are not overcharged.
“The Honorable Minister in his statement further stressed that the government’s role in a deregulated economy was to provide, through the operation of the Petroleum Products Pricing Regulatory Agency, a pricing mechanism to create a market-driven price regime.
“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.”
In the document released on June 4 by PPPRA, it was stated clearly that marketers of petroleum products would be allowed to fix prices as determined by market forces. Therefore, the turnaround of the Agency seems to be indicating ulterior intention.
On Saturday, after the decision of the federal government to deregulate the downstream sector made the news, Nigerians started advocating the disbandment of the PPPRA. Many said that the Agency’s sole reason for existence is to regulate pricing for petroleum products, and should be dissolved as the price is no longer regulated.
“The job of PPPRA is to regulate the price of petroleum products. As the price of petrol will no longer be regulated, PPPRA is no longer needed. Scrap it now!,” said Dr. Joe Abah, former Director General of BPSR.
It believed that the calls to scrap the Agency have instigated fear among its members, due to job insecurity, and they are putting up a disclaimer to part of the information contained in the document it released earlier to save their job.
Moreover, it was noted that the Regulatory Agency was unable to effect uniform pump prices in the country before the PMS subsidy was removed, as there were notable differences in prices of petroleum products in some parts of the north, the Southeast and some South-western states.
At a time when the Nigerian economy is going through strains due to COVID-19 pandemic, and the government has been advised to cut its spending by, among other things, minimizing ministries and agencies, Nigerians are calling on the federal government to scrap the PPPRA as soon as possible.