The Petroleum Products Pricing Regulatory Agency (PPPRA) on Tuesday, says it no longer gives oil marketers a guiding price band for the Premium Motor Spirit (PMS) alternatively known as petrol.
It said this is because the industry has fully been deregulated, thus marketers are now free to fix prices.
The agency’s Executive Secretary, Abdulkadir Saidu made the disclosure at a briefing in Abuja.
While fielding questions from newsmen, he explained that its sole responsibility was to monitor the market trends and put a check on marketers against profiteering.
“PPPRA remains the regulator of the downstream sector and we monitor operations of all the sector operators. The difference now is that we do not indicate that this is the price you must sell because if we do that, that is price-fixing.
“We watch the trend in the market and where somebody is going beyond the band, we pull the trigger, because the regulator is expected to protect the interest of the consumer and disallow instances of profiteering. We have our code of conduct that applies to all operators. Even in developed countries, there are regulators,” he said.
He stressed that fuel prices would be based on forces of demand and supply depending on where petroleum product is sourced from.
He said a deregulated regime was different from a price fix.
“It is in the price fix you have a clear view of what the final price is. It is based on bargaining power and it is based on where you source your product from,” he noted.
Saidu who spoke through the General Manager (GM) Human Resources, Victor Shidok explained that the Pipelines and Products Marketing Company (PPMC) had been announcing fuel prices as it is currently the sole importer of oil.
He argued that the foreign exchange (FOREX) challenge has deterred marketers from importing, hence leaving PPMC as the only source.
“PPMC has its sources of getting the price; the only difference you are seeing now is that PPMC still remains the only source of product supply and I think other marketers because of the challenge of forex that is why they are not importing. You know the role forex plays particularly with the sourcing of petroleum products,” he said.
In his explanation, he said the price being announced is arrived at after the PPMC must have conducted its cost analysis and then decided on the price it is giving out the product to marketers.
He said: “PPMC is a marketer, it also sells oil. PPMC also carries out analysis and says this is my own price. If I sell at this pump price, I will be able to break even.
“That announcement they always make in terms of what price they would sell their product is based on their analysis. Then they tell their customers, ‘If you are willing to pick products from us, this is the price we will accept.”
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