Despite the recent commencement of the deregulation of the downstream sector of the petroleum industry, the Minister of State for Petroleum Resources, Timipre Sylva, said the Federal Government will continue to intervene in determining the retail pump price of petrol.
The Minister said the continued intervention in the pricing process was the responsibility and duty the government owes Nigerians to protect and safeguard fuel consumers from exploitation by oil marketers.
Mr Sylva gave the clarification in his office in Abuja to explain why the government appears not to allow market forces to determine the fuel price at the pump since its latest effort at deregulation began on March 19.
He said the decision by the government to continue to intervene in determining fuel price was informed by the ugly experiences it was having with fuel marketers.
““Deregulation of the downstream sector of the petroleum industry was approved on the 19th of March. Since then, fuel prices have been reviewed twice. Yet, marketers deliberately refused to bring down the cost of diesel and other petroleum products whose landing costs had also reduced,” the minister said.
“Also, petrol and kerosene are strategic to the country. Therefore, we cannot allow their prices to be determined wholly by fuel marketers. Consumers had to be protected. This is what obtains globally.
“If we allow marketers to fix prices of these commodities anyhow they like, it will not augur well for us. That is why we will continue to intervene in price-fixing. In the recent price-fixing, we allowed the marketers to get some profit, but we determine the price to protect consumers by creating a price band.
“Look at our battle with marketers. We brought down the price of PMS, because the landing cost had come down. But, the marketers refused to bring down the prices of diesel and other deregulated commodities, even though their landing costs had come down also,” the Minister said.
He said if the Petroleum Products Pricing Regulatory Agency (PPPRA) does not continue to interface with the marketers in determining the prices of PMS, the oil marketers would fix the prices arbitrarily and exploit consumers.
The PPPRA, he said, would continue to work with the marketers to determine the fuel prices to ensure the best pricing is arrived at for the consumers.
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He said the government was aware the price of crude oil would rise again in the near future, which would also affect the pump price of PMS.
In the event of such eventuality, he said the government was already in the race to provide a cheaper alternative to petrol, in the form of Compressed Natural Gas for cars.
No impact on food prices, others
Despite the reduction in the pump price of petrol, the Minister lamented that food prices and other commodities and services, like transportation, were yet to come down.
He called on Nigerians to hold market players accountable when the price of petrol begins to rise again.
“We have reduced fuel price, but the prices of commodities in the market are not going down. But, if fuel increases tomorrow, the marketers will increase the price of PMS, and the cost of these items would skyrocket,” he said.