The Independent Petroleum Marketers Association of Nigeria (IPMAN) has stated that Nigerians should anticipate fluctuations in the price of Premium Motor Spirit (PMS) due to the deregulation of the petroleum downstream sector. The recent hike in petrol price from N488 to N617 per liter is a reflection of what can be expected in a free market, according to Mr. Mike Osatuyi, the National Operations Controller of IPMAN.
The increase in petrol price was triggered by the rise in the ex-depot price of petrol, which went from N446.57 per liter to N580 per liter. In Abuja, NIPCO filling stations have adjusted their pump prices to reflect the new rate of N617 per liter, while in Lagos, most NNPC retail outlets have raised their prices from N488 to N568 per liter.
Osatuyi clarified that petrol prices will no longer remain static due to market fundamentals such as the exchange rate and crude oil costs, which will determine whether prices go up or down. The removal of subsidy has opened up the market for marketers to import petrol, breaking the NNPC’s monopoly.
The current hike is attributed to an upward movement in the international crude oil market’s price and the increasing exchange rate, which stands at N820 to a Dollar in both official and parallel markets. As old stocks of products are nearly depleted and new imports arrive, the increase reflects current market realities.
Opinion:
The deregulation of Nigeria’s downstream petroleum sector has brought about fluctuations in petrol prices, leading to significant challenges for ordinary citizens. While it may foster competition among marketers, the fluctuating prices can adversely affect the already burdened populace. The government should ensure that mechanisms are in place to protect consumers from excessive price hikes while maintaining fair market practices. Additionally, there is a need for transparency in how the diverted funds from subsidy removal will be channeled into improving infrastructure, education, healthcare, and job creation, as promised by the government. Nigerians deserve a clear and accountable plan to ensure that the benefits of deregulation are realized without imposing undue hardships on the citizens.