The Petroleum Products Pricing Regulatory Agency (PPPRA) yesterday announced that it was no longer involved in the fixing of the pump price of petrol, disclosing that the interplay of market forces and not the organisation now determines how much Nigerians buy the product.
The agency noted, however, that it will continue to monitor the operators in the downstream petroleum sector to ensure that marketers do not abuse the freedom that has come with the deregulation of the pump price of petrol.
Executive Secretary of the PPPRA, Mr Abdulkadir Saidu, who spoke during a press briefing in Abuja, explained that the job of the agency henceforth was to \u2018police\u2019 the marketers and prevent profiteering at the expense of consumers.
Saidu, who was represented by the General Manager, Administration and Human Resources, Mr Victor Shidok, stressed that one of the reasons Nigerians were not experiencing the real impact of deregulation yet was because of the foreign exchange challenges being faced by marketers who were supposed to bring in the product.
According to him, the shortage of forex, which he said was already being sorted out by the Central Bank of Nigeria (CBN), was making the Petroleum Products Marketing Company (PPMC), look like the sole marketer for now.
\u201cThe government pronouncement that the sector is deregulated means that prices strictly obey the forces of demand and supply. You could have a regulator that will always stand as a watchdog to see how these forces play out and how the interest of both operators and consumers will be protected.
\u201cIn this situation, in a deregulated regime, you don\u2019t expect that, because it\u2019s different from price fixing where we have a clear say in the final price you see in the market. It is the market that is operating and it\u2019s based on bargain power. It is based on where you source your products.
\u201cFor PPMC, it is a marketer, it also sells products. It also carries out analysis to say, this is my own price because I sourced for this product and it\u2019s that mechanism they have adopted. It is based on their costs. It\u2019s like bottle water which is produced in a deregulated market. You look at how much you produced it and what price you can sell\u201d he said.
The PPPRA boss posited that its function henceforth is to ensure that operators in the downstream play fairly and consumers of petrol in the country are not short-changed.
\u201cIn a truly deregulated regime, there\u2019s nothing like price band because you are free to source your product. All you need to do is look at how much you spent. We will ensure that all stakeholders play fairly.
\u201cPPPRA remains the regulator of the downstream and will keep monitoring operators. The difference now is that we do not indicate or fix prices that you will sell because if you do that, it is price fixing. We will intervene when somebody is going beyond and profiteering,\u201d he added.
According to the agency, there\u2019s a code of conduct that applies to all operators, explaining that even in developed countries where they have fully developed system of deregulation, there are always regulators.
Saidu said that the confusion on the role of the PPPRA stemmed from the fact that this is a transition period, noting that very soon Nigerians will enjoy the choices that accrue from a liberalised market, even with the PPMC as a marketer like some private operators.
\u201cThe only difference we are seeing now is that PPMC still remains the only source of product supply and I think for other marketers, it\u2019s because of the challenge of forex that\u2019s why they are not importing, given the role forex plays in the sourcing of petroleum products.
\u201cThe product we are talking about is PMS (petrol). Other products have been deregulated a long time ago. Only PMS. PPMC is a marketer like OANDO. For PPPRA we know the trend in the market and we intervene when the marketer is going out of hands.
\u201cPPMC will have to follow the rules and be treated like a marketer. In a deregulated environment PPMC are traders. PPMC is into business too. We are facing a difficult situation because foreign exchange is not allowing other marketers come in yet. That\u2019s why the gains are not seen yet.
\u201cIf you are not seeing other marketers come in, it\u2019s because they are still understudying the market and due to the exchange rate. This year has been a difficult year not just in Nigeria.
\u201cWhen you are not earning foreign exchange as you should, there will be so much pressure on the little that you have and that\u2019s what we are seeing. It will not remain like that forever. The exchange rate will still fall. There\u2019s no more price band or fixing\u201d he noted.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Petroleum Products Pricing Regulatory Agency (PPPRA) yesterday announced that it was no longer involved in the fixing of the pump price of petrol, disclosing that the interplay of market forces and not the organisation now determines how much Nigerians buy the product.The agency noted, however, that it will continue to monitor the operators in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-241054","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/www.thetidenewsonline.com\/index.php?rest_route=\/wp\/v2\/posts\/241054","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thetidenewsonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thetidenewsonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thetidenewsonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thetidenewsonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=241054"}],"version-history":[{"count":0,"href":"https:\/\/www.thetidenewsonline.com\/index.php?rest_route=\/wp\/v2\/posts\/241054\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.thetidenewsonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=241054"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thetidenewsonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=241054"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thetidenewsonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=241054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}