‘Government will continue to determine petrol price despite deregulation’

Crude oil benchmark to reduce from $57 to $25 per barrel, says minister

The Federal Government yesterday declared that marketers will not be allowed to determine prices of petroleum products over apprehensions that profiteers could swindle consumers.

Government had accused marketers of keeping prices of diesel and kerosene high despite the reduction in the price of crude oil at the international market.

Speaking yesterday at a Ministerial media briefing in Abuja, Minister of State for Petroleum Resources, Timipre Sylva, who presented a scorecard of government agenda in the oil and gas sector, said the Federal Government has had a running battle with marketers in a bid to reduce prices of the products.

In a similar vein, oil-producing companies in the country have also been directed to reduce their production due to challenges posed by a coronavirus, especially reduction in the price of crude oil and Organisation of Petroleum Exporting Countries (OPEC’s) compulsory reduction in crude oil output.

Sylva also confirmed that President Muhammadu Buhari approved oil licensing, starting with a marginal bid round and a major bid round before the end of this year.

He said work has been completed on a new Petroleum Industry Bill (PIB), which is awaiting consideration by President Buhari and the Federal Executive Council (FEC), adding that the new bill would make the country to the most attractive investment destination for oil and gas investors.

Disclosing that the country has completely deregulated the downstream sector of the industry, Sylva said, “PMS and petroleum products are very strategic and you cannot allow their prices to be determined solely by marketers.

“It is the government’s responsibility to protect consumers. Anywhere in the world, there is the recommended retail price.

“The consumer protection agency will ensure that nobody profits inordinately from the people. If you allow marketers to go ahead and fix prices as they like, it will not be good because the commodities are very central to the lives of the people.

“That is why we have a regulator to determine the price, bearing in mind what it takes the marketers to import the products, allowing for some profits and ensuring that the consumers are also protected. It is done everywhere in the world.”

Meanwhile, Minister of Finance, Zainab Ahmed, has disclosed that the proposed amendment to the 2020 budget would be presented to the National Assembly next week, as the $57 crude oil price benchmark approved in the appropriation bill was no longer feasible and may have to be slashed to $25 per barrel.

A statement issued by the media office of the Senate President yesterday revealed that the minister, who made the disclosure while briefing the National Assembly yesterday said, “It is necessary to reallocate resources in the 2020 budget to ensure effective implementation of required emergency measures and mitigate the negative socio-economic effects of the COVID-19 pandemic.”

The National Assembly had met with the minister over Federal Government’s plan to amend the N10.59 trillion 2020 budget it passed in December 2019.