Petrol could sell higher under new pricing regime, says PPPRA
The new pricing regime introduced few weeks ago by The Federal Government, which allows the Petroleum Products Pricing Regulatory Agency (PPPRA) to modulate prices of petroleum products, especially Premium Motor Spirit (popularly known as petrol), could push pump price of the product up should crude oil price increase at the international market.
Stating that the price could also go lower provided price of crude remain low, the Executive Secretary of PPPRA, Abdulkadir Saidu, said government would continue to monitor trends and modulate the price monthly based on prevailing market realities and other fundamentals.
Though the Federal Government had introduced the market-based pricing regime last month, pushing petrol pump price from N145 to N125 per litre, the private sector had insisted that the market might not progress unless government fully deregulates the downstream sector.
Saidu noted that the agency was engaging with the Central Bank of Nigeria (CBN) to determine the applicable foreign exchange rates for the importation of petroleum products and modality for accessing the applicable foreign exchange window by the marketers.
“This rate is reflected on the pricing template to determine the expected open market price of the product. This means that going forward, the guiding price to be advised will be determined based on the rates quoted by CBN,” he submitted.
The PPPRA boss stated that efforts were being put in place to develop alternative fuels by deepening the utilisation of LPG/CNG as autogas in Nigeria, adding that the development would come into fruition in the medium term, and help to cushion the effect in case of high oil price.
He pointed out that government was planning to extend the same pricing mechanism to ATK, AGO, adding that the essence of the price band was to ensure efficiency that is both beneficial to the consumers and marketers.