Stakeholders have expressed concerns over the secrecy presently surrounding the pricing template of petrol in the country, demanding for transparency in the system.
The demand was made by participants at a one day workshop held in Abuja on Friday, to review emerging issues in the Nigerian downstream petroleum sector.
This, the stakeholders said have become necessary following the emergence of facts suggesting that Nigerians are presently over paying for petrol by about N20 per litre at the current price.
The petrol pricing template usually published publicly by the Petroleum Products Pricing and Regulatory Agency (PPPRA), is a document which captures the cost elements of importing petrol into the country, upon which the pump price of a litre is determined.
The template contains elements like the cost of crude at the international oil market, the cost of freight, port charges, storage charges, distribution and marketers’ margins as well as exchange rate, all of which is summed to determine the guiding price of a litre of petrol.
Publication of the template has been a core responsibility of the PPPRA on monthly basis to guide marketers and consumers on petrol price and prevent an exploitative situation.
However, in the last few months the PPPRA has reneged on its responsibility to monitor the market and advise the Nigerian National Petroleum Corporation (NNPC) which is presently the sole importer of petrol, and other marketers on the appropriate guiding prices of petrol on a monthly basis.
Speaking at the workshop the Former Chief Operating Officer/Group Executive Director, Upstream Business Unit of the NNPC, Mr. Rabiu Bello, pointed out that there was insufficiency of market information that would allow importers and consumers to understand the basis for the current price or any change in price.
He noted that the ex-depot price published by the NNPC through its subsidiary the Pipelines and Products Marketing Company (PPMC) is now the only basis for pricing petrol across the nation, expressing concerns whether the PPMC is now both a player and regulator.
Bello in his presentation further expressed concern as to how the 30percent increase in cost elements in PPPRA template between March and November 2020 was arrived at, even as he stated that the calculated open market prices of petrol (based on the template) ought to be N146.75.
Also picking holes at the current reduction in the pump price of fuel by N5, Bello queried how the reduction was arrived at, what stakeholders were consulted by the NNPC prior to the reduction; or if Nigerians were being overcharged previously.
To correct the anomaly in the market and gain consumer confidence, Bello emphasized that transparency, sufficient political will, effective planning and strong regulator are essential ingredients necessary for the sustainable implementation of deregulation policy.
He added that provided NNPC remains the only importer, Nigeria should develop a strategy for importing petrol at minimum cost from the international market and sharing same to all wholesalers for domestic supply at competitive prices.
Also in his presentation, Industry Expert, Dr. Adeoye Adefulu, explained that full deregulation is not limited to the removal of fuel subsidies alone.
Noting that Nigeria was far from achieving a deregulated downstream sector, he said deregulation will require the creation of a competitive market environment and allowing competent players to grow the market through deployment of current technology, good governance and international best practices.
Adefulu added that it would also require unrestricted and profitable investments in infrastructure, open to all players under a level playing field and which guarantees reasonable returns to the investors, a strong regulator which won’t be required to fix products prices but to monitor and enable transparent and fair competition amongst players, protect consumers from exploitation and prevent market dominance.