Lagos — Stakeholders in the downstream sector have welcomed the newly increased petrol price of N160 per litre saying it reflects market realities.
The Major Oil Marketers Association of Nigeria, MOMAN in a statement on Friday said allowing market economics to dictate prices of Petroleum Motor Spirit, PMS will prevent return of subsidies.
“We welcome governments action in allowing the market to determine prices as we believe it will prevent the return of subsidies while allowing operators the opportunity to recover their costs”, the statement read in part.
Signed by its Chairman, Mr. Tunji Oyebanji, the Association explained that although prices at the pump will have to be adjusted to reflect realities of the increase of ex-depot prices by the Petroleum Pricing Marketing Company, PPMC, however, the magnitude of the increase, timng and location is a decision left to each company.
“Consistent with global best practices, MOMAN does not dictate prices to its members as this would be anti-competition in a fully deregulated market”.
Making a case for a fully deregulated downstream sector, MOMAN said this, in the long run, will encourage investment and create jobs.
“We all must remember the country is broke and can no longer afford subsidy. There is no provision for it in the budget. With this the incentive for smuggling will be reduced. More funds will be available to the government for investment in infrastructure, roads, health, education and power”.
“Deregulation means that prices will go up and down. They went down in April now they will go up as we are entering the European winter season and demand for refined crude goes up. Already there are indications of more investments in local refining in Nigeria which will moderate the cost. Fierce competition will also moderate the price”.
“As you can see, not everyone is selling at the same price. So as things stand we are into full Deregulation”, the statement read.
While the Association said it supports full deregulation, it however regretted that the change came at a time when the country’s economy is on a downturn and citizens are struggling for survival.
“Unfortunately this is coming at the time when most of our citizens are struggling with difficulties created within the context of the post Covid-19 economy, but we believe that Nigeria has been presented with a historic opportunity to get it right this time as a country to rebuild our economy for the benefit of all Nigerians”.