Nigerian Petroleum Authority ends price fixing, embraces market forces for petrol pricing
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced that it will no longer fix prices or provide templates for Premium Motor Spirit (PMS), commonly known as petrol.
The Authority’s Chief Executive, Mr. Farouk Ahmed, made this statement during a news conference held in Abuja on Friday.
He emphasized that prices would now be determined by market forces in the liberalized market.
“In the NMDPRA, we no longer operate like the previous system where the PPPRA fixed the price. In a deregulated market, it is the market force that dictates the price,” Ahmed stated.
He further clarified that the market was open to all importers who met the necessary requirements.
It was no longer solely the responsibility of the Nigerian National Petroleum Company Limited (NNPC Ltd).
“We have established regulations to ensure compliance with quality control and the availability of the product. We issue licenses to potential importers and oversee operations in the sector, including depots. However, we will not impose a price cap,” Ahmed explained.
Regarding the NNPC’s role, Ahmed emphasized that their responsibility was to determine the prices of the petrol they imported and not take over the authority’s responsibilities.
“At present, the NNPC is the sole importer. We have instructed the NNPC to recover its costs based on their import expenses.
We are aware of the shipping, offshore, ex-depot, and ex-pump costs. However, we cannot dictate the selling price as the market is deregulated,” he added.
Additionally, Ahmed revealed that the Federal Government had officially abolished petroleum equalisation and the national transport allowance.
The NMDPRA, along with the federal government and the Consumer Protection Commission (FCCPC), will implement stringent monitoring measures to prevent petroleum marketers from engaging in profiteering activities.
Moreover, Ahmed stated that marketers were now free to obtain foreign exchange from any location worldwide to import petroleum products and recover their costs without obstacles.