Major marketers won’t resume petrol importation until pump price is deregulated

THE Major Oil Marketers Association of Nigeria (MOMAN) has said it is not thinking or considering resumption of petroleum products importation at the moment because the regulatory environment is not profit driven.

It also observed that the understanding expressed by the Petroleum Products Pricing Regulatory Agency (PPPRA) of possible downward review of pump price of petrol following decline in crude oil price in the international market may not necessarily prompt price adjustment.

The new chairman of MOMAN, Mr. Adetunji Oyebanji, explained that price adjustment is a function of several factors of which crude pricing is just one of the various indices.

Oyebanji said the exchange rate is a major determining factor and that except the present price template is reviewed taking into account all the changing market variables, pump price may likely not change in either direction.

He noted that since the association is operating under a regulated regime and that it can only follow guidelines issued by the industry regulator.

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The chairman while reacting to a question on whether price adjustment of petrol is convincing and conceivable said, available infrastructure may not support the idea, because beside high exchange rate, other associated costs like, bridging cost which is done by road takes toll on transportation of products.

He said marketers are currently operating at huge losses and many operators have shut down operations because the sector is highly regulated and not investment friendly.

“We are currently tied to a margin which is fixed and we cannot adjust. If my input cost is going up and exchange rate is going up it affects our business, pump price has to do with exchange rate, so we have to understand the economics,” he said.