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PPPRA backtracks, says cap remains, marketers can’t fix fuel price.

By Michael Eboh

In a clear reversal of its ‘Market Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020,’ released June 4, 2020, which removed the price cap on fuel and which said the price would, henceforth, be determined by market forces, the Petroleum Products Pricing Regulatory Agency, yesterday, said it would not allow petroleum products, marketers, to fix the price of Premium Motor Spirit (PMS), also known as petrol. In a statement issued in Abuja, after calls for its scrapping by Nigerians, since it would be redundant in a fully deregulated downstream sector; the PPPRA, however, stated that its role in the determination of the monthly price for PMS would be advisory, while its price would serve as a guide to marketers in the sale of the commodity. Executive Secretary of the PPPRA, Abdulkadir Saidu, who signed the statement, further confirmed that the Federal Government had deregulated the downstream segment of the market, stating, however, that, “Suffice to say that in a deregulated market, the role of a Regulator in monitoring and regulating activities in the sector cannot be over-emphasized.” He disclosed that the ‘Market-Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020,’ published June 4, 2020, does not confer on marketers the power to fix prices for the product as they deem fit, but should rather, rely on guiding prices that would be advised by the PPPRA according to market realities. Confirming details of the Regulation, Abdulkadir declared that the PPPRA shall monitor market trends and advise the Nigerian National Petroleum Corporation (NNPC) and oil marketing companies on the monthly market-based guiding price, which shall include the indicative retail price at which the product shall be sold across the country. He said, “It would be recalled that the removal of Premium Motor Spirit (PMS) price cap and implementation of a market-based pricing regime was first announced by the Honorable Minister of State for Petroleum Resources, Chief Timipre Sylva, in March 2020. This was followed by PPPRA’s publication announcing the Regulation on the market-based pricing regime, thus creating a legal framework for the policy. “The Honorable Minister had earlier stated that the Federal Government will continue to monitor the price of petroleum products and advise on monthly guiding prices that guarantee reasonable returns to operators while ensuring consumers pay appropriate prices in line with market reality and are not overcharged.

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