Petrol price fixing: NMDPRA says regulation, liberalization allows market forces to dictate
Written by Samson Ojeniran on June 2, 2023
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says it will no longer fix prices or release templates for petrol prices.
The Authority Chief Executive (ACE), Farouk Ahmed, explained that under the liberalized market, market forces are allowed to dictate prices.
The market he noted is now open for everybody that wants to import as far as they meet all the requirements.
Also, the NMDPRA promised to guide their operations whether at the depot or wherever the product is but will not put a cap to say this is what the price must be.
Ahmed explained that the NNPC’s role is to fix the prices of the petrol it imports and not take over the responsibilities of the Authority. This is to allow it recover its costs because it knows how much was used to import the product
The NMDPRA chief also revealed that the Federal Government has officially scrapped petroleum equalization as well as the national transport allowance.
He added that the NMDPRA and the Federal Competition and Consumer Protection Commission (FCCPC) will mount aggressive monitoring of activities in the downstream sector to prevent profiteering by petroleum marketers.
Ahmed said further that marketers are now free to source their foreign exchange anywhere around the world to import petroleum products and then recover their costs without impediment as The market structure will also dictate the price swings at every point in time. He maintained that the Dangote will help the nation in two ways by giving Nigeria easy access to petroleum products on-land for security reasons and increase employment for professionals
However, Ahmed was quick to caution against optimism for cheap petroleum products, as the company will be buying crude oil at the international price.