- Labour Kicks against new price
- Accuses FG of benefitting the rich
- Calls out NNPCL on new importers
CEM REPORT,ENERGY | The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has attributed the rise in petrol pump price to the global crude oil price increase.
Farouk Ahmed, speaking to journalists after a closed-door meeting with Vice President Kashim Shettima at the State House in Abuja stood on the statement of the NNPCL that the market determines prices.
“As a regulator, I told you back in May that we are not going to be setting prices. The market will determine itself, and as you saw back in early June when prices came out, it was based on the cost of importation plus other logistics of distribution and, of course, the profit margin by the importer.”
“This market is deregulated; it is open to all participants.”
He noted that deregulation of the sector will allow market forces to determine price adding that it also permits everyone to import as long as they work within the framework, especially in terms of quality.
“We have about 56 marketing companies that applied and obtained licenses to import.
“Out of those, 10 of them have indicated to supply within the third quarter, which is July, August, September. Already, we received some cargoes from these markers: Prudent Energy, AYM Shafa and Emadeb. Emadeb Cargo is arriving tomorrow.”
On pricing, Ahmed stated that the agency will not put a cap on prices to encourage market forces.
“But to pricing, as a regulator, we are not going to put a cap on the price because we are not part of those importing. We are not a marketing company; we are just a regulator.
“So, when you say market forces are working, basically, what it is that you buy, you consider the price of crude going up. A couple of weeks ago, the price of crude was hovering around $70/barrel. Now it’s hovering around $80/barrel.
“So, the crude price also drives the product price. You know, because the importers are importing, they are basing it on the cost of importation plus the freight and other cost elements in terms of local distribution”.
Meanwhile, the Nigeria Labour Congress (NLC) has accused the federal government of “taking away benefits from the poor and giving them to the rich”.
Joe Ajaero, the president of the Nigeria Labour Congress (NLC) in an interview on Channels Television said the government was “toying with Nigerians” on the issue of fuel subsidy and especially petrol prices.
He called out the Nigerian National Petroleum Company Limited (NNPCL) to make public the names of the independent marketers who now import petrol into the country since it is no longer the sole importer.
He stated that the NNPCL inflates the price of petrol according to the dollar rate even when the product wasn’t imported at such a price.
“If you have a single market where everybody must change dollars at N800/$1, you removed the market where people were changing dollars at N450 to import, it means the very moment that dollar value increases to even N900/N1000, you will tell us that you imported it at current value.
“Despite the fact that the products you have now are not the ones that were imported under N800/$, Clearly, the government is toying with Nigerians. What is happening is not Economics, but a reign of impunity.”
He noted that there are disparities in what the federal government says and what it does.
“NNPCL cannot import and say the commodity is imported by marketers, that is not true. If the government withdrew subsidies of petroleum products and suddenly while we are about to start committee meetings, there is another price increase, why then will government seek a court injunction and use other measures if it is not their business?
“It seems we have entered a reign where Nigerians are being punished unnecessarily and where lies are coming up everywhere.”
The Labour leader also called out the decision of the government to make N70 billion available to subsidize the National Assembly, meanwhile, the fuel subsidy was removed which has affected only the poor masses. He accused the government of taking away benefits from the poor and giving them to the rich.
He accused the government of being dictatorial and currently attacking Nigerians through the increase of prices (fuel, school fees, electricity tariffs).
Recall that the price of petrol rose from around ₦500 to over ₦600 on Tuesday.
Mele Kyari, Group Chief Executive Officer, NNPCL, said that the new price was determined by market forces.
He explained that with the deregulation of the oil sector, market realities will force the price of petrol up sometimes and at other times force it down.