The Minister of State for Petroleum Resources, Chief Timipre Sylva says the downstream oil sector was deregulated on March 19, with the reduction in the pump price of the Premium Motor Spirit(PMS) also known as petrol.
Sylva made the clarification at a ministerial briefing giving a score card of the performance of the sector in Abuja, on Thursday.
He said that the monthly price modulation introduced by the Petroleum Products Pricing Regulatory Agency (PPPRA) was to ensure that Nigerians benefited from the development in the sector.
“I am not just announcing deregulation today , let us try and understand ourselves about deregulation, deregulation I said took effect on the March 19, what we announced was already deregulated we all know,
“Fortunately, we have completely deregulated the product supply system, so we took out subsidy from PMS.
“At this point, I see some kind of paradox because we started by trying to avoid or stop product smuggling across our borders, so, with deregulation and removal of subsidy, I see us getting to the point where we might be encouraging the development of market even outsider our borders.
“Now, NNPC is no longer bearing the burde,” he said.
He added that the PPPRA pricing regulation was strategic as government would not allow the marketers to determine the price to sell the products wholly.
“ The PMS and petroleum products are very strategic commodities, so you cannot allow the price of this commodities to be determined only by marketers.
“It is government responsibility to protect the consumers, anywhere in the world, if you want to buy anything, you have what you call the recommended price.
“The consumer protection agency will fix a price, so that nobody will profiteer on the people. So, if you allow marketers to just go ahead and fix prices as they like, it will not be good for our people because this commodity is very central to the lives of our people,’’ he said
Sylva noted that the regulator would always determine products price bearing in mind what marketers had spent to give space for them to make profit and also ensure that consumers were protected.
“If you say that PPPRA should not at list work with the marketers, the marketers can decide to profiteer on the people.
“Look at one problem that we have been having with the marketers , today we drop down the price of PMS because the landing cost came down and the landing cost of AGO (Diesel ) also came down but the marketers have refused to bring the price down.
“ We have been having a running battle with them to bring their price down because the landing cost has also reduced but they refused,’’ he added.
The Minister noted that government has the right to protect the consumer adding that the PPPRA was established to play that role.
On no price template for the month of May, he said that the PPPRA was instructed not announce any price as it was not necessary.
“Yes, we told PPPRA not to announce any price because it is not necessary, after all FAAN determines the price of airline tickets, they don’t announce all the time, they just discuss with the marketers and they increase the ticket price
“CBN regulates interest rates with the banks, so, that way PPPRA will be working with the marketers and ensure that the best pricing is achieved for the consumers but as I said, government is also mindful of the fact that prices can go up and also go down,’’ he added.
Due to the global crash in oil price, the PPPRA announced that it would be issuing monthly price modulation for the pump price of PMS and other products.
In March, the price of PMS was reduced from N145 to N125 per liter, on April 1, it issued a price band of lower N123 and higher N125 per litre and in May no price adjustment was announced.