New petrol price: Oil marketers insist on full deregulation – The independent oil marketers operating under the aegis of the Private Depot of Oil and Gas Marketers Association of Nigeria (PDOGMAN) has impressed on the federal government the need to embark on full deregulation of the downstream sector of the nation’s oil and gas industry, saying this would benefit the economy on the long run.
The association spoke against the backdrop of the new pump price announced by the federal government.
It may be recalled that the federal government had on Wednesday announced the increase of petrol pump price from N121.50 to N140.80 per litre.
In a statement by the Petroleum Product Pricing Regulatory Agency (PPPRA) the current retail price indicates a 18.50 increase as the agency recommended between N140.80 and N143.80 as the new retail band for a litre of petrol.
“After a review of the prevailing market fundamentals in the month of June and considering marketers’ realistic operating costs, as much as practicable, we wish to advise a new PMS pump price band of N140.80 – N143.80/litre for the month of July 2020,” it added.
However, speaking on behalf of the body, the National Secretary of PDOGMAN, Mr. Fred Ufua, described as counter-productive the new pump price increase, insisting that it was not done with the best intensions.
According to him, the independent oil marketers have been at the receiving end of the federal government’s defective policy in the last 20 years.
The decision to increase the pump price, he maintained, was taken arbitrarily without due consultation with relevant stakeholders. “Such unilateral decision reminds one of policy initiatives under the military regime which do things in fiat.
It’s not in the overall interest of the operators and ultimately in the public interest because the policy is not founded on a solid ground.”
Pressed further, he said, “The question is why can’t the government make up its mind and take a firm stand on full deregulation of the sector? Is the price going to be a temporary or permanent measure?
What happens if the global oil price increases again, are we going to review the price upward?”
While lamenting the challenges confronting their members, Ufua said, “We buy at N137 and are expected to sell at N143.That’s less than N10 margin.
If you add the cost of transporting our goods and other costs of production like excessive charges from both the local and state governments, we’re losing a lot.”
The federal government, he stressed, “Should allow for full deregulation and let demand and supply determine prices instead of this knee jerk approach. Once there is full deregulation of the sector, everyone would benefit.”The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Financial Watch. Every investment and trading move involves risk. You should conduct your own research when making a decision.