Ministry of Petroleum Resources and the Office of the Attorney General of the Federation to issue a new guideline on the prices of petroleum products in the country.
The Executive Secretary of the PPPRA, Saidu Abdulkadir, who disclosed this in Abuja on Monday, explained that extant laws such as PPPRA Act No. 8 of 2003 and the Petroleum Act give the agency the legislative backing to formulate policy initiatives on pricing regime, limit price gouging, create a level playing field for operators and protect consumers.
“In accordance with the above, the development of Guidelines for Petroleum Products Commercial Framework has been concluded and Code of Conducts for Operators is currently being firmed-up to reflect the present price regime,” Abdulkadir said.
“The agency, in collaboration with the Office of the Minister of State for Petroleum Resources and Office of the Attorney-General of the Federation has put in place regulation on the PMS market-based pricing regime.”
The PPPRA also hinted that it is currently finalizing the review of cost elements and profit margins on the pricing template for marketers to reflect the current market-driven pricing regime, which was last reviewed in 2016 while ensuring that consumers are not overcharged.
The PPPRA scribe maintained that while the new regime is expected to ensure transparency and enhance participation of operators in the sector, it undoubtedly raises several issues that the PPPRA will systematically address the course of implementation of the deregulated market.
In arriving at prevailing pump price at any time, he said the agency takes into consideration a number of factors which includes amongst others: Petroleum Product Cost, Foreign Exchange (Forex) rate at which Oil Marketing Companies (OMCs) import petroleum products, other associated cost components that include freight rate, trans-shipment cost, statutory charges (NPA, NIMASA), terminal charges (storage and Jetty throughput), financing and distribution margins (Wholesalers/Marketers, Transporters, Retailers, Bridging Fund and Administrative Charges).
Abdulkadir denied PPPR fixes prices of petroleum products saying, “the agency does not fix prices but rather provides a guiding price band by monitoring petroleum products prices daily; using the average price of the previous month to determine prices for the following month, for appropriate cost-reflective pricing that ensures reasonable returns to Oil Marketing Companies (OMCs).