The Petroleum Products Pricing Regulatory Agency has said that it is currently reviewing the cost elements and profit margins on the pricing templates for oil marketers.
The agency said the review was expected to reflect current market-driven pricing regime.
The Executive Secretary, PPPRA, Saidu Abdulkadir, who said this in a statement issued in Abuja, noted that the pricing template, which was last reviewed in 2016, would ensure consumers are not over-charged.
Marketers have in the past berated the government’s intervention and interest without allowing the market forces to drive the sector.
But Abdulkadir, in the statement, noted that the deregulation of the downstream sector was dependent on the enforcement of appropriate laws by strong regulatory agencies.
According to the Secretary, the PPPRA pricing template takes into consideration a number of factors, which include petroleum product cost and the foreign exchange rate at which oil marketing companies import petroleum products, among others.
He said, “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 to West Africa is about 30 days.
“This period encompasses the import financing process to delivery at retail outlets.”
The PPPRA boss, however, said the new pricing regime would encourage marketers to resume supply of PMS, leading to further value creation in the downstream sector.
He said, “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 regulates the banks and the financial sector; Nigerian Communication Commission regulates telecommunications; National Insurance Commission regulates the insurance sector and the same exists for operators in Nigeria’s downstream petroleum sector.”
He added, “To this end, it is not out of place for the agency to provide a guiding price band with the aim of protecting 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.”
He noted that the PPPRA no longer fixed prices, but rather provided a guiding price template by monitoring petroleum products prices daily.
