The Petroleum Products Pricing Regulatory Agency (PPPRA), yesterday, said it is engaging with the Central Bank of Nigeria (CBN) to open up the importation of petroleum products to private businesses.
The ongoing engagement is believed to usher the downstream sector into a liberalized and market-determined pump price for petroleum products.
For several years now, only the Federal Government, through the Nigerian National Petroleum Corporation, NNPC imports the products due to the pricing regulation which entailed fixed and uniform pump price across all locations in the country.
The pricing regime had shot out private businesses as profit margins are wiped out by in-built subsidy in the pump price.
The Executive Secretary of the PPPRA, Mr. Abdulkadir Saidu, in a statement on Monday disclosed that the engagement with the CBN was aimed at determining the applicable Foreign Exchange (forex) rates for the importation of petroleum products and modality for accessing the forex window by the oil marketing companies.
“This rate is reflected in the pricing template to determine the expected open market price of the product. This means that going forward, the guiding price to be advised, will be determined based on the rates quoted by CBN. “The price is expected to guide the sale of PMS in Nigeria.
“In fact, we plan to extend the same pricing mechanism to Aviation Turbine Kerosene (ATK), Automotive Gasoline Oil (AGO), among others. The whole essence of the price band is to ensure price efficiency that is beneficial to both the consumers and oil marketers.”
Saidu further stated that the country’s existing refineries were expected to play key roles in the current fuel pricing regime, adding that the policy would also create immense opportunity for increased private sector participation in the industry.
He said, “The Nation’s refineries are required to key into the new pricing regime just like all other operators both private and public. The new regime will open up the Oil and Gas Sector for more private players and investments in refineries, storage facilities and transportation.
“At the end of the day, we expect to see more private players operating in the industry. The liberalization of the entire industry will make it possible for private investors to recoup their investments, leading to a more vibrant downstream sector.”