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PPPRA: petrol price unconnected with crude price

The Petroleum Products Pricing Regulatory Agency (PPPRA) on Wednesday said there was no relationship between the prices of crude oil in the international market and the pump price of petroleum products.

This is contrary to what the public have been fed with on the deregulation of marketing of petrol.

It, therefore, failed to say how the Pipeline Products Marketing Company (PPMC), a subsidiary of the Nigerian National petroleum Corporation (NNPC) arrived at the ex-depot price of N151.56 per litre of petrol.

The ex-depot price is also referred to as the landing cost of petroleum products from which the dealers (marketers) know the pump price.

But the Executive Secretary of the agency, Saidu Abdulkadir, told reporters at a news conference in Abuja that the market of the product had been deregulated and only marketers could fix its pump price.

Asked why the prices of petrol should be on the increase in the last three months when the prices of crude oil have not exceeded $45 per barrel, he said: “There is no direct relationship between the prices of crude oil and its products. So many factors play a role.”

But he refused to give the breakdown of the factors that play the role and their prices.

He said: “It is a deregulated market. If you go to the market to buy a bottled water, you don’t ask the seller how much did you produce the bottled water?

“If we were in a situation where markets (prices) are being fixed, that is when you should have asked that question. But in a purely deregulated market, there is nothing like price build-up (breakdown) because you are free to source for the product.”

According to him, PPPRA only ensures that marketers play the game in compliance with its rules by monitoring.

Its General Manager, Human Resource, Mr. Victor Chidok, who represented him, added that the PPPRA no longer fixed the price band for marketers.

“If I give you the price band today, it is like fixing the price band,” he said when he was asked to give the price band.

He said the PPMC is a marketer like Oando and Total. In a deregulated market, it sells petrol in line with market forces.

The agency, however, said PPMC is still the sole importer of the product since other marketers have abandoned it because of high exchange rate.

According to him, “the exchange rate this year has been difficult. When you are not earning foreign exchange due to the COVID-19, there will be issues.”

Abdulkadir, however, projected that when the system starts stabilizing, the question of high petrol price will no longer arise.

SOURCE: TheNation