Business
Deregulation will force down PMS price —PPPRA
The Petroleum Products Pricing Regulatory Agency (PPPRA) said on Sunday full deregulation of the downstream oil and gas sector would help force down price of Premium Motor Spirit (PMS), also known as petrol.
The agency’s Executive Secretary, Saidu Abdulkadir who disclosed this in a statement in Abuja, attributed the rise in the pump price of the commodity to cost of petroleum products in the international market and the cost of acquiring foreign exchange (FOREX).
The PPPRA had on July 1 announced a pump price band of N140.80k and N143.80k per liter for PMS.
This was an increase of N20.30 from the N121.50 per litre announced in June.
According to the PPPRA chief, the newly-adopted market-based pricing system was due to the need to promote the growth of the Nigerian petroleum industry and the economy in general.
He said the oil marketing companies had resumed fuel importation and directly imported a total of 536,000 metric tonnes of PMS into the country.
Abdulkadir stressed that additional investment in local refining would engender competition and force down prices of products.
He said: “The agency is cognizant of the public outcry trailing the recent surge in petroleum products prices.
READ ALSO: We have not given marketers freedom to determine petrol prices —PPPRA
“However, this decision is a reflection of the new market-based pricing system, which does not seek to harm consumers but foster growth in the sector and prevent wastages resulting from the subsidy.
“The recent upward movement in pump price is becoming a bone of contention because of the fragile state of the economy.
“However, deregulation of the sector is in the country’s best interest because competition has a way of forcing down prices and ensuring that companies place a tight rein on production cost such that wastes that could be passed on to consumers in the form of high prices are eliminated.
“The trillions of naira that would have been spent subsidising PMS could be injected into other key sectors such as agriculture, education, health, power and infrastructure.
“There will also be focus on the provision of social safety nets for the poor who bear the brunt of the COVID-19 pandemic.”
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