Independent and major marketers of petroleum products have so far imported about 500,000 metric tons of petrol, equivalent to five billion litres into the country upon their return to petrol importation activity, the Petroleum Products Pricing Regulatory Agency (PPPRA) has disclosed.
The private marketers had pulled out of the petrol importation business in 2017, when they could no longer cope with the unfavourable market fundamentals and realities at the time, a situation that ushered in the Nigerian National Petroleum Corporation (NNPC) as the sole importer of petroleum products.
However, the liberalisation of the downstream sector by the federal government this year opened up the space again for the marketers to play in, but not without reservations among the marketers, who still believed more clarity was needed in the policy.
The General Manager, Corporate Services, PPPRA, Mr. Kimchi Apollo, told THISDAY in a chat that marketers had been applying for permits to import petrol and were being giving by the agency, resulting in the said volume imported by them.
“For the past two or three years, it is only NNPC that brings. NNPC will bring and then tell you that they have removed this and that amount as subsidy; you don’t know what to say, nobody can say anything.
“But now, we are giving them (marketers) opportunity to import. They imported over 500,000 metric tons of petrol (both independent and major marketers, not NNPC).
“They requested for permits and were given. So they have opportunity now to import. But we need to also guide them; we need to make sure they do not surcharge or short-change Nigerians,” Apollo said.
However, the PPPRA spokesman expressed worry over the attitude of marketers to pump price of petrol, saying their swiftness to adjust their pump prices whenever there is price increase without a corresponding speed to adjust when there is reduction in pump price, justified government’s fear in allowing them to determine prices of petrol.
In its latest petrol price advisory issued July 1, 2020, the federal government had increased the pump price of petrol to between N140.80 and N143.80 from between N121.50 to N123.50 sold in June, the highest increase since the commencement of the price modulation regime in March, and most of the filling stations in the country quickly adjusted their prices upward same day the announcement was made
He said: “If you see agitations by the marketers (major marketers, independent marketers, depot owners), all the agitations and what they are writing on the papers is that PPPRA should be removed and allow them to fix the price. You know, when PPPRA hands off diesel and kerosene the price of diesel never came down.
“Even when there was fall in oil price, did they reduce the price of diesel? They did not. So these are the kind of business men we have. And so they are agitating that they don’t want government to fix price and things like that.
“When the price comes down they are reluctant to adjust their pump price but when it goes up, like it has done now, all of them will go to the highest bar and quickly.
“Within an hour all of them will change to the new price. So that is it. We said the guiding price is between N140.80 to N143.80.
“If they said they have the interest of Nigerians at heart, why is nobody even selling at N142, N141?. That’s the kind of business men we have, and they have been agitating, pushing, going everywhere, talking to the press, making people feel government should not interfere and all that.
“And there is no responsible government that will say, ‘you go and fix the price you want to fix’. Then the government is not serious. No serious government will sit down and fold its arm and allow that to happen.”
Apollo said the guiding price was being fixed in a way that marketers could be able to play and encourage competition, adding that with time, there would be marketers who would not want to sell at the highest price as a strategy to attract customers.
According to him, “even as it is now there are people who are not selling at N143.80; some are selling at just N143 just to make sure that there is a difference between their own and others. So these things will from time to time play themselves out.
“But you see, we are looking at the market fundamentals. The price can go up and come down. Even as it has gone up now, it can still come down if something happens. It is all about what the market today is like.”
He attributed the inability of companies to build modular refineries after receiving licences to part of the reasons Nigeria still imports petrol with attendant subsidy, explaining that the subsidy even discouraged those who managed to build from going into the refining of petrol, noting that they prefer producing diesel whose price is high.
Apollo added: “They don’t want to go to petrol because government is subsidising it. But once it is free now, there is no subsidy on it, most of these refineries will complete and start producing petrol. And as many of them start producing petrol, the price will come down. Because they are no longer importing, they are producing locally, that’s one thing.
“That is the essence of saying we are removing subsidy. And first, we are having issues around because nobody, including me and you will want increase in price. It is the same thing with labour, everybody will not want increase in price. But we keep saying that government spends about N2 billion everyday on subsidy.”
Source: This Day