The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has raised the alarm over what it described as exploitation of Nigerians by petroleum marketers, saying pump price of Premium Motor Spirit (PMS), also known as petrol, should be between N700 and N750 per litre.
PENGASSAN President, Comrade Festus Osifo, while speaking during a press conference in Abuja on Monday, expressed dismay over exploitation of Nigerians by petroleum marketers, that despite a significant drop in international crude oil prices, from about $80 to $60 per barrel, petrol continues to retail around N900 per litre in Nigeria.
Accusing the Nigerian Midstream and Downstream Petroleum Regulatory Authority of failing to enforce pricing oversight, Osifo said, “NMDPRA should not watch the suppliers of products exploit the citizenry on the pretence of deregulation.”
According to him, crude oil price and the exchange rate are two major factors that determine the pump price of PMS, saying both have recently shown trends that should have brought the price of petrol down.
“In the downstream today, in the Nigerian oil and gas industry, we have seen a trend. And the trend, if you could recall, at a time when the price per litre of petrol was sold around 900 Naira per litre, you realise that the international crude price was somewhere around $80 per barrel.
“So we have been monitoring the trend. When the crude price reduced to around $60 per barrel, we did not see a commensurate reduction in the pump price,” he noted.
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According to Osifo, these two factors contribute up to 80% of the final price of PMS.
Therefore, he argued, with crude prices currently ranging between $62 and $65, the retail price of petrol should have dropped significantly.
“If crude price was somewhere around $80 per barrel, and we were having pump price at about 900 Naira per litre or thereabout, today, at a time crude price hovers around $62 to $65 per barrel, we only saw a marginal reduction in the pump price,” he said.
Citing international pricing benchmarks, Osifo added that the current market realities point to a fair fuel price range of N700 to N750 per litre.
“There is what we call PLAT. If you go online, you are going to see the PLAT cost per cubic metre of PMS.
“And when you convert that to litres, and you bring it down to our Naira, you are going to see that at a time when crude price was around $60 per barrel, we should be buying our PMS somewhere around 700 to 750 Naira per litre. That is how it should be when you do the calculation properly,” he further explained.
While acknowledging that businesses are profit-driven, Osifo said the role of regulators is to ensure fairness.
“Yes, we understand that people have invested in their business, and they want to make a profit. It is the responsibility of businessmen to maximise profit. We don’t begrudge any business organisation that wants to maximise profit. That is why we have the regulators,” the PENGASSAN boss added.
He however urged NMDPRA to begin publishing pricing templates regularly to ensure transparency and prevent abuse of deregulation.
“We don’t begrudge businesses for making profits. But it is the regulator’s responsibility to protect the people. If this exploitation continues, Nigerians will never benefit from global oil price drops, only bear the burden when prices rise,” Osifo added.
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