29 January 2015, Lagos – With the sharp drop in crude oil prices in the international market yet to affect the price of Automotive Gas Oil (diesel) in Nigeria, industry experts have said consumers are supposed to have seen a reduction in the pump price of the product.
They said since diesel had already been deregulated, it ought to be subject to market forces. On January 18, 2015, the Federal Government reduced the price of petrol by N10 per litre in response to the fall in oil prices.
The maximum indicative benchmark of open market price of the diesel was N99.11 per litre as of January 27, according to data obtained from the Petroleum Products Pricing and Regulatory Agency, PPPRA, but the price of the product in filling stations across the country ranges between N140 and N165 per litre.
The price of crude oil, which constitutes a major component in the pricing template, had plunged by about 60 per cent since June 2014 when it peaked at $115 per barrel.
Nigeria, Africa’s top oil producer, relies on importation for most of its fuel needs as the country’s refineries are in a poor state. The fall in oil price has triggered the decline in the landing cost of imported petroleum products.
An energy analyst and Technical Director, Drilling Services, Template Design Limited, Mr. Bala Zakka, said, “Diesel has been deregulated and ordinarily if we were to have an organised government, since the price of crude oil has fallen by more than 50 per cent, the price of diesel is supposed to have fallen a long time ago.
“Nigerians are not getting the benefit of the deregulation, and it also shows that the government we have is not a caring or intervening government. If a government allows for certain measures to take place in its economy, it is also the duty of the government to make sure that it is not being abused. Ordinarily, even before the price of petrol was reduced, we expected that those diesel marketers should have been the first to reduce their price.”
Zakka added, “But because those people are greedy and they also have the intention to continue to short-change Nigerians, fortunately for them, our government didn’t even bother to intervene and those people are still going ahead short-changing Nigerians. You can imagine how much these people have being short-changing Nigerians since the price of oil started crashing.”
The Director, Centre for Petroleum, Energy Economics and Law, Prof. Adeola Adenikinju, said, “Diesel is still being sold for up to N160 per litre. What are the regulators doing about it? You don’t just leave some things to the market completely. If you want to do that, then liberalise everything and you then protect the interest of the consumers. If you leave it to a group of people to continue to share the market among themselves and collude, then you are not allowing market system to work.”
The Chairman, Trade Union Congress of Nigeria, Rivers State Chapter and former National Industrial Relations Officer, Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN,Mr. Hyginus Onuegbu, said the fact that there had not been a reduction in the price of diesel meant that more profits were being made from Nigerians.
He said, “There is no reason why the falling oil prices of over 50 per cent should not have affected the price of diesel, especially since they have told us that diesel has been deregulated.
“Diesel is used mostly by industries and particularly the manufacturing companies. So a reduction in the price of diesel will actually benefit the production sector.”
– The Punch