Nigeria seems to be walking a familiar path on petrol price, following the call by former Group Managing Directors (GMD) of the Nigerian National Petroleum Corporation, NNPC, for an increase in the price of the commodity.
Though the Federal Government, the Petroleum Products Pricing Regulatory Agency, PPPRA, NNPC and oil marketers have come out to deny any plan to increase the price, skepticism remains, as this was the same way the FG vowed, severally, that the price of petrol, otherwise known as Premium Motor Spirit (PMS), would not be hiked, until the increase was effected in May.
Ahead of the incident of May, government utilized a perfect excuse when it blamed the hike on the unending petrol scarcity which almost crippled the country for about one year and the scarcity of foreign exchange.
Today, the excuse, though tenable, appears to be the declining value of the naira against major international currencies, especially the dollar. To test the ground, government appears to be using the former GMDs of the NNPC. It is interesting to note that at the meeting where the call for the hike was made, the incumbent GMD, Maikanti Baru, was present, as well as a representative of the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.
The PPPRA no longer releases petroleum products pricing templates, irrespective of the fact that the sector has not been totally deregulated. The development has put Nigerians in the dark as to the actual price of PMS, and this, according to some oil marketers, was a sign that a hike in the price was in the offing. Prior to the last increment, the PPPRA had disclosed that the pricing templates would be updated on
Prior to the last increment, the PPPRA had disclosed that the pricing templates would be updated on quarterly basis, but it failed to update the templates for the third quarter. The PPPRA, in refusing to update the pricing template, is presently creating a semblance of a deregulated market, whereas Nigerians are told that the market is partially deregulated or liberalised.
Price cap Making the call for the price hike, the former NNPC GMDs claimed that the PMS price cap of N145 per litre is not congruent with the liberalization policy, especially with the foreign exchange rate and other price determining components such as crude cost, Nigerian Ports Authority (NPA) charges, among others, remaining uncapped. On the surface, the claim by the former NNPC chief helmsmen appeared true, but the fact remains that the Federal Government is not sincere about its pricing policy, as evident in the PPPRA’s refusal to update and publicise the template.
Matters concerning the actual fuel price are shrouded in utmost secrecy unlike what obtains in the past, where the templates were updated almost on daily basis. The call for the removal of the N145 price cap was started by some major and independent oil marketers, claiming difficulties in assessing foreign exchange, as well as the declining value of the naira. The Federal Government had, at different for a, disclosed that the country had saved over N1 trillion from the discontinuation of subsidy.
What this means is that if petrol price is not hiked, the country might end up spending such amount on subsidy in the next one year.
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