02 February 2015, Lagos – When late President Umaru Musa Yar’Adua decided that diesel price be deregulated, it was in line with his administration’s pledge to dismantle the alleged fuel mafia. But several years after the deregulation, the expected market behaviour of a deregulated product is far from being realised in Nigeria.
The price of diesel has remained high in Nigeria despite the crash of oil prices in the international market to below $50 per barrel. The mafias who have found their seat in President Jonathan’s economic management team have refused to let price of diesel come down. These men of yesteryears who keep recycling themselves in the corridors of power are denying Nigerians the benefit of deregulation of this one essential economic product.
Following President Yar’Adua’s approval, the NNPC increased the ex-depot price of AGO from N60 per litre to N69, while the price of LPFO was raised from N22 per litre to N44, representing a 100 per cent hike. But in no time, under the disguise of rising oil prices, the price of diesel went up to N162 per litre. But prices of crude have long crashed and diesel price has not come down in line with global market practice in a free market environment.
Following the crash of crude oil prices, the maximum indicative benchmark of open market price of diesel is about N99.11 per litre as of today, going by the Petroleum Products Pricing and Regulatory Agency. Surprisingly, the price of the product in filling stations across the country ranges between N155 and N165 per litre with PPPRA not lifting a finger about the price or raising eyebrows about the unwholesome trend.
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.
If Nigeria were a country where leaders walk the talk, 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.
Unfortunately, Nigerians are not getting the benefit of the so-called deregulation, and it also shows that the government agencies are not intervening in matters that touch the welfare of the populace except what benefits the ruling class. 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. PPPRA, DPR, NNPC and the Ministry of Petroleum Resources are turning their eyes the other way because powerful Nigerians are involved, milking the people and donating to parties for political gains. Ordinarily, if there were laws governing the deregulation of diesel, even before the price of petrol was reduced; Nigerians had expected that diesel marketers should have been the first to reduce their prices.”
But the average Nigerian businessman is greedy, exploitative and also has the intention to continue to short-change Nigerians. Fortunately for them, it is in their interest for government not to intervene and so they are still going ahead short-changing Nigerians. The question is: if diesel is still being sold for up to N160 per litre in an era of falling oil prices, what are the so-called regulators doing about it? There is nowhere in the world where there is absence of regulations. You don’t just leave things to the market completely. If you want to do that, then liberalise everything and you then protect the interest of the consumers.