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Nigerians may pay more for fuel —PPPRA

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Increase in petrol price inevitable –Rewane

The Petroleum Products Price Regulatory Agency (PPPRA) has said Nigerians should be ready to pay high or low prices for petrol considering the price liberalisation scheme that currently exists.

Similarly, the PPPRA is in talks with the central bank to decide the prevailing foreign exchange rates for importation of petroleum products by oil marketers.

Abdulkadir Saidu, PPPRA’s Executive Secretary, made the disclosure on Monday while fielding questions on the new PMS price regime in the country.

“What we have in place is a market reflective pricing system. Petroleum products prices will be adjusted in line with market realities and the result is what we see presently with prices on the downward slide.

“Accordingly, price will naturally be adjusted to reflect a true picture of market fundamentals at any particular period, high or low,” he said.

Saidu stated that there were plans to develop substitutes for the PMS through increasing the utilisation of Liquefied Petroleum Gas/Compressed Natural Gas as auto gas in the country.

He noted that this would materialise in the medium term to provide the needed relief in case a situation of higher oil price arose.

“The agency is engaging with the CBN to determine the applicable forex rates for the importation of petroleum products and modality for accessing the applicable forex window by marketers.

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“This rate is reflected on the pricing template to determine the Expected Open Market Price of the product. This means that going forward, the guiding price to be advised will be determined based on the rates quoted by the CBN,” Mr Saidu said.

According to him, the price would serve as a guide for the sale of petrol in Nigeria as the PPPRA prepared to apply the same pricing mechanism to diesel, kerosene and other petroleum products.

The PPPRA Executive Secretary affirmed that the price band was vital in achieving price efficiency that would be mutually beneficial to oil marketers and consumers.

“Going forward, pricing of the PMS will reflect market fundamentals. The PPPRA will continue to monitor price trends and advise monthly guiding price for all petroleum products, based on prevailing market realities and other pricing fundamentals.”

Mr Saidu also remarked that the recent oil price crash triggered by the coronavirus pandemic and the fall in global oil demand had an immediate impact on the Expected Open Market Price of petrol, thereby pushing it below the N145 per litre pump price.

The development compelled government to direct the Nigerian National Petroleum Corporation to reduce its ex-coastal price of petrol.

In his words, “The plunge in global crude prices made it increasingly difficult for government to finance the 2020 national budget as it was predicated on a crude price of $57 per barrel.

“The low crude oil prices, therefore, presented the opportunity to address the lingering challenges associated with the under/over-recovery regime and free up vital funds required to develop other key sectors of the economy.”

He assured that the initiative would boost private sector investment in the downstream sector while also stimulating the resumption of products importation by marketers.

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