The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said crude oil sourcing, single-source domestic refining, logistics and transportation costs are pushing up volatility in petrol pump prices under the deregulated market.
Head of public affairs at NMDPRA,
George Ene-Ita, who disclosed this in an interview with NAN in Abuja on Sunday, stated that petrol prices are completely deregulated and therefore reflect fluctuations linked with the supply chain, including crude procurement, refinery delivery timelines, imported cargoes, transportation and taxes.
He noted that marine and inland taxes associated with the movement and supply of petroleum products are also taken into account in the pricing of petroleum products.
“This issue is knotty in the sense that there are various factors involved,” he said.
“Pump price petrol has been completely deregulated. And if this is the case, it also means that all volatilities associated with supply have to be factored in.
“These factors include single source domestic refining, sourcing of crude oil as feedstock, time lag between when crude is sourced offshore and when it eventually arrives the refinery.
“They also include time lag between when PMS cargoes are ordered and when they eventually arrive our ports for subsequent inland distribution and supply in the case of imported fuel.”
The NMDPRA official informed that transportation and landing costs, as well as marine and inland taxes, also contribute to the price of petrol.
“Perhaps when the domestic refining ecosystem becomes more robust, competitive and sustainable, the issues regarding pricing will become clearer and more beneficial to consumers,” he said.
The spokesperson said refinery pricing templates and ex-depot prices are not regulated under the current framework.
Ene-Ita, however, said NMDPRA is collaborating with stakeholders and agencies, including the Federal Competition and Consumer Protection Commission (FCCPC), to ensure price equilibrium and parity at the last mile.
Also speaking, president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Abubakar Maigandi Garima, appealed to the federal government to intervene in crude oil pricing for domestic refining to moderate fuel prices and ease pressure on consumers.
He called for government intervention to cut down the cost of crude supplied to domestic refineries during periods of volatility in the international market.
“What we are saying is that if Nigerians can make this huge investment, we should support them. Government can intervene by reducing the cost of crude oil to the refinery.
“When the refinery refines the product at a lower cost, it can also reduce the price for Nigerians, and this will help the economy.”
