The full board of the Petroleum Products Pricing and Regulatory Agency (PPPRA) will meet in Abuja today amidst calls for the full deregulation of the downstream petroleum sector following Wednesday’s decision by President Muhammadu Buhari to cut the pump price of petrol to N125 per litre.
The Nigerian National Petroleum Corporation (NNPC) is represented on the board, and so are the oil marketers association whose members have been strident in their demand for cost-reflective margins for their business and that of thousands of their dealers scattered around the country.
The PPPRA is the sole authority charged with responsibility for petrol price modulation and concern was expressed on Wednesday because NNPC had unilaterally announced pump price at its own stations without waiting for a pricing template from the PPPRA.
It is expected that today’s meeting will centre on a new pricing template that takes its cue from the directives of the president that petrol pricing be indexed henceforth on the international price of crude.
Oil marketers attending today’s meeting are also expected to push their age-long demand for improved margins to prop up a crucial sector going comatose daily as a result of a gripping government over-regulation and sinking debt owed by players.
Oil marketers get an average of N6 per litre now but they are pushing for that to be doubled, while dealers who get an average of N2.36 per litre today want that moved up to between N6-7. There is also the question of what to do with the heavily abused bridging purse managed by the Petroleum Equalisation Fund.
The marketers are also hoping that today’s meeting will offer some clarity as to real intention of the government when it cut the price of petrol two days ago. While some see the price cut as signposting deregulation, others are not so sure.
Over the years, international firms have pulled out of Nigeria’s downstream sector as government control crimps margins and takes away the shine from a once buoyant industry.
It costs about N200 million to build a new petrol station, but the margins are no longer enough to sustain the sector with many dealers going burst or facing massive debt pile.
The entire 60 million litres of petrol supplied daily in Nigeria is imported by NNPC’s products division via a much-maligned swap arrangement with overseas refiners.
