Marketers Fault FG’s Petrol Price Cap, Says It Breaches PIA
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has faulted the federal government’s directive that the Nigerian National Petroleum Company Limited (NNPCL) cut its petrol pump price, saying capping the price departs from the law.
National president of PETROAN, Dr Billy Gillis-Harry, told LEADERSHIP that the Petroleum Industry Act (PIA) fully eliminated price controls in the downstream petroleum sector, and that a price cap therefore runs against the Act.
He described price capping as an aberration and said it cannot guarantee fair competition in the market.
How the price cap came about
The federal government last Thursday announced a 30-day plan to reduce petrol prices through a discount arrangement at all filling stations operated by NNPC.
The minister of finance and coordinating minister of the economy, Taiwo Oyedele, announced the plan at a press conference in Abuja. The intervention is backed by President Bola Ahmed Tinubu.
Government said the move is meant to give temporary relief to households and transport operators contending with high energy and living costs. It is also part of measures to cushion the impact of global crude oil price shocks and petrol market volatility.
Under the arrangement, NNPC Retail, an NNPC subsidiary, has agreed to forgo its profit margin on petrol and sell at cost, while government negotiates a N1,350-per-litre ceiling on the landing or ex-gantry cost of the product. A landing cost of N1,300 per litre, for instance, would translate into a pump price of N1,300.
“There’ll be a discount on NNPC petrol for the next 30 days, with priority for public transporters,” Oyedele said.
Government stressed that the initiative should not be seen as a return to the subsidy era, saying that would destroy the nation’s economy.
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