Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has attributed the recent volatility in petrol prices to rising logistics costs, crude oil sourcing challenges and reliance on single-source domestic refining.
George Ene-Ita, NMDPRA head of public affairs, said petrol prices are fully deregulated and therefore respond to changes across the petroleum supply chain.
Speaking in an interview with the News Agency of Nigeria (NAN) in Abuja on Sunday, Ene-Ita said factors affecting prices include crude oil procurement, refinery delivery timelines, imported petrol cargoes, transportation and applicable taxes.
He said the time between sourcing crude offshore and delivering it to refineries, as well as delays between ordering imported petrol and its arrival at Nigerian ports, can also affect pump prices.
“Pump price petrol has been completely deregulated. And if this is the case, it also means that all volatilities associated with supply have to be factored in.”
Ene-Ita also identified transportation and landing costs, alongside marine and inland taxes, as additional contributors to petrol prices.
He said prices could become more predictable when Nigeria’s domestic refining ecosystem becomes more robust, competitive and sustainable.
According to the NMDPRA spokesperson, refinery pricing templates and ex-depot prices are not regulated under the current framework.
However, he said the regulator is working with stakeholders, including the Federal Competition and Consumer Protection Commission (FCCPC), to promote price equilibrium and parity at the last mile.
IPMAN seeks cheaper crude for local refineries
The president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Abubakar Maigandi Garima, called for government intervention in the pricing of crude supplied to domestic refineries.
Maigandi said refiners currently face pressure from fluctuations in international crude oil prices because they procure crude at prevailing market rates.
He argued that higher crude prices increase refining costs, which are subsequently reflected in petrol prices paid by consumers.
The IPMAN president said government intervention should not amount to a return to fuel subsidy but could serve as a temporary measure to support domestic refining and ease pressure on consumers.
“What we are saying is that if Nigerians can make this huge investment, we should support them. Government can intervene by reducing the cost of crude oil to the refinery.”
He also called for a more predictable crude pricing framework for domestic refineries, saying frequent price changes make it difficult for refiners to plan and maintain stable petrol prices.
His comments came after petrol prices rose above ₦1,300 per litre on September 1, following a rise in Brent crude to $95.36 per barrel.
Two days later, IPMAN said petrol stations across the Federal Capital Territory would begin reducing pump prices within days.
Chronicle NG reports that the latest developments highlight the competing pressures facing Nigeria’s deregulated petrol market, with crude prices, domestic refining capacity, logistics and transportation costs continuing to influence what motorists pay at the pump.
SOURCE: chronicle.ng