With the much anticipated Dangote petrol expected to hit the marketfrom September 15, Nigerians’ hope of a reduced petro pump price may have been dashed as the product is entangled inoil pricing mechanism bureaucracy.
This is more so if the cost implications of the crude supplies and the refining process are anything to be factored into the process. Already, it was learntthat the Federal Government and the Nigerian National Petroleum Company Limited (NNPC) are working on the retail price of the Premium Motor Spirit hiked by 45 per cent to N897 per litre this week, with major marketers offering the product averagely N900 while independent marketers sell around N1,200 per litre.
Commenting,an oil refining expert, who pleaded anonymity, said Nigerians should not expect a lower priced product from Dangote Refinery given that its product is of high premium, just as its crude supply pricing was not lower than what is sold in the international market.
According to the source, NNPC will not sell crude below international pricing, asNigeria is expected to abide by Organisation of Petroleum Exporting Countries (OPEC) policy.
The source, however, called for a substantial review of fiscal policies to entrench competition and strong regulatory environment in the midstream and downstream oil sector.
A pointer that a cheaper petro pump price may not be in offering is the recent comment by the Executive Vice President, Downstream of NNPC, Adedapo Segun, warning Nigerians to prepare for a possiblefurther increase in petro price.
He said Nigeria should move toward market-based petrol pricing to permanently eliminate fuel queues, disclosing that NNPC’s current price of N897 per litre is still being subsidised.
He added: “If you look in section 205 of the Petroleum Industry Act (PIA), it says petroleum prices or fuel prices should be based on unrestricted free market conditions. So, when you have a situation where fuel prices remain the same, that’s what is unusual. You won’t see that in other climes, where you have prices fixed for a long period.
“It’s actually supposed to move in consonance with changes and market conditions. During summer months, prices are high because it’s a driving season, in the winter months, prices go down. So, that’s what the PIA provides for, prices should move with the seasons.”
However, a fresh report by Bloomberg has also stated that the Federal Government is considering granting Dangote Refinery the authority to set petrol prices.
Quoting officialsfamiliar with the matter, the report indicates that government would permit Dangote to set the price of gasoline for petroleum marketers starting next month.
