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HOW PPPRA PLUNGED FUEL MARKET INTO PRICE CRISIS

The domestic fuel market is another complicated price confusion which has triggered scarcity of the premium motor spirit also called petrol as marketing companies apply caution against sudden price shocks.

The crisis emerged from a new pricing template published by the Petroleum Products Pricing and Regulatory Agency (PPPRA) which projected actual market price of the product to be in excess of N212.50 per liter. And given that deregulation campaign by the government, the market responded with panic.

The agency has since deleted the troubling templates and published clarifications that the offending calculation was a mere guide for the market which is currently managing delicate public sentiments  against price hike in a highly depressed economy.

Oracle Intelligence reports that supply rigidity associated with state monopoly of petrol imports has rendered the entire market vulnerable to price adjustments by the Nigerian National Petroleum Corporation (NNPC), enabling light signals over prices to unsettle the market.

Currently, many retail outlets in the country are on shutdown, triggering avoidable fuel queues across major demand centers in the country while many retail operators seize the opportunity to hike prices for desperate motorists.

Survey by Oracle Intelligence showed that price band for pms in the market has since expanded between N162 and N178 per liter. Lower price bands operate in Lagos and Abuja while the higher end of the price band rule markets in the Southeast and southsouth zones of the country.

At Okigwe, in Imo State, our correspondent confirmed price of N175 per liter at Pauly Mama filling station while at Asaba in Delta State, the price was N165 per liter at filling station operated by Rainoil Limited.

In Anambra State, petrol sold at negotiated prices at some old filling stations bearing extinct brands like AP, Texaco and Mobil. It was difficult to find out from pump attendants the current affiliation of the retail outlets.

However, motorists who participated in panic buying as rumours of scarcity loomed said they were more interested in getting fuel than arguing over the retail rates and integrity of the dispensing pumps.

While the market responded to conflicting supply signals, the NNPC and the Petroleum Products Pricing and Regulatory Agency (PPPRA) mounted campaigns to avert mass protests against the prevailing situation.

NNPC which takes the responsibility of market supply declared through its Group Public Affairs Division (GPAD) that it has continued to supply petrol to the market from all its depots at old prices, ruling out any price increase in the month.

Group General Manager in charge of GPAD of NNPC, Dr Kennie Obateru, stated that “contrary to speculations of imminent increase in the price of Premium Motor Spirit (petrol) in the country, the Nigerian National Petroleum Corporation (NNPC) has ruled out any increment in the ex-depot price of petrol in March, 2021.”

He said NNPC kept prices at existing rates in deference to ongoing engagements with organized labour and other stakeholders on an acceptable framework that would not expose the ordinary Nigerian to any hardship.

He cautioned petroleum products marketers not to engage in arbitrary price increase or hoarding of petrol in order not to create artificial scarcity and unnecessary hardship for Nigerians, assuring that NNPC has enough stock of petrol to keep the nation well supplied for over 40 days.

Dr Obateru urged motorists to avoid panic buying. He also called for regulatory sanctions on marketers involved in products hoarding or arbitrary increase of pump price.

The PPPRA is the commercial regulator of the domestic fuel market. It works in conjunction with the Department of Petroleum Resources (DPR), Weights and Measures unit of the Federal Ministry of Works and Housing, and Standards Organization of Nigeria (SON) to enforce regulations, rules and standards in the market.

In response to the price crisis in the market, the PPPRA stated that the monthly price guides on its website do not automatically translate to increase in prices.

Executive Secretary, Abdulkadir Saidu, stated that PPPRA was mindful of engagements with the organized labour on the deregulations of the domestic fuel market and therefore would not increase prices of petrol.

“While consultation with relevant stakeholders is ongoing, PPPRA does not fix or announce prices and therefore there is no price increase. The current PMS price is being maintained while consultations are being concluded,” he maintained.

He added that the agency was currently monitoring the situation across retail outlets nationwide.

“While assuring the public of adequate products supply as the average PMS Day[1]Sufficiency as of March 11, 2021 is over 35 days, the PPPRA pledges to continue to perform its statutory function in ensuring that the downstream sector remains vibrant as well as support both government and members of the public,” he reiterated.

In still hinting on possible increase in prices of petrol, Abdulkadir Saidu argued that the Market[1]Based Pricing Regime for PMS Regulation 2020 as gazetted by the government means that “prices are expected to be determined by market realities in line with the dictates of market forces.”

One of the conditions for the implementation of the Market-Based Pricing Regime for PMS Regulation 2020, he maintained, is the monthly release of Guiding Price to reflect current market fundamentals.

SOURCE: oracleintelligence.com.ng

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