The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says it would no longer be in charge of determining or regulating the price of petrol in Nigeria with the fuel subsidy regime no longer in place.
According to the NMDPRA Chief Executive, Mr Farouk Ahmed, during a press conference in Abuja on Friday, prices of petrol in Nigeria would henceforth be determined by the interaction of market forces.
He said unlike before that the agency fixes the price; in a deregulated market, it is the market force that dictates the price but the NMDPRA would now focus on the quality of the product.
“As far as we are concerned in the NMDPRA, this is not like before when the PPPRA fixes the price; in a deregulated market, it is the market force that dictates the price,” he said.
Ahmed added that unlike before that the Nigerian National Petroleum Company Limited (NNPC Ltd) is the sole importer, the market was now open for everybody that would want to import fuel as far as they met all the requirements.
“So, it is not about the Nigerian National Petroleum Company Limited (NNPC Ltd) alone.
“We put the regulation in place, we make sure quality control is complied with, we make sure the product is there and we give licence to prospective importer.
“We make sure we guide the operations of everyone in the sector whether at the depot or wherever the product is but we will not put a cap to say this is what the price must be,” he added.
Giving further explanation, the NMDPRA boss said his outfit would not fix prices for the fuel imported by the NNPC.
According to Ahmed, “In the case of the NNPC, the organisation is the sole importer at this point. We told the NNPC to recover its costs because they know how much it cost them to import the product and sell it.
“Of course, we also know how much shipping, offshore, ex-depot and ex-pump are. But we cannot tell them to sell at a price because the market is deregulated.”
He added however that the NMDPRA and FCCPC will collaborate to curb excesses if certain prices were way above the expected profit margin but the “market structure will dictate the price swings at every point in time.”
Ahmed cautioned Nigerians against optimism for cheap petroleum products, saying products may not be cheaper because the company would be buying crude oil at the international price.
“Dangote Refinery is a game changer in terms of accessibility. By the time the NNPC refineries and other modular refineries across the country come on stream, Nigeria will be a net exporter of petroleum products,” he said.