NIGERIA risks enabling an unhealthy monopolistic market if the Nigerian National Petroleum Company Limited (NNPCL) continues to solely determine the pump price of petrol, some industry stakeholders have warned.
The NNPCL, rather than the defunct Petroleum Product Pricing Regulatory Agency (PPPRA), has been the agency determining the pump price of petrol since President Bola Tinubu removed fuel subsidy on May 29.
The Tinubu administration has maintained that the local petrol price would flow with market forces like the price of crude on the international market, foreign exchange rates, and marketing/ distribution logistics at home.
But some stakeholders in the business have condemned NNPCL’s price determining monopoly, saying it could trigger its hijack of the market.
Former Chairman of Major Oil Marketers Association of Nigeria (MOMAN), Adetunji Oyebanji, who spoke with The ICIR, said a serious regulatory enforcement would instill confidence in the sector and support competitive fair pricing.
“The NNPCL, because of its size, and because it is the major supplier in the market today, may likely influence the market. The regulatory authority needs to make necessary enforcement and ensure competitive fair pricing.
“For now, we follow their price. They are the major supplier now, although more marketers are being licensed,” Oyebanji said.
Adetunji argued that marketers’ participation in fuel importation would become more robust if the NNPCL reflected the true picture of the market fundamentals.
President of the Petroleum Retail Owners Association of Nigeria, (PETROAN) Billy-Gillis Harry, in a chat with The ICIR, also thrashed the fuel price adjustment by the NNPCL without conferring with stakeholders.
Harry said, “They changed price to N617 per litre without consulting us. This is completely wrong. We are all competitors, but the NNPCL is a super partner. They have the assets, and they still wield the powers they had when they were fully in government. This is not fair competition, but we will get to compete with them.”
But the chief executive officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, absolved the NNPCL of any price-setting monopoly, as he said price of the product was market-determined.
Ahmed said, “I had said back in May we are not going to be setting price. The market will determine itself. As you saw back in early June when price came out, it was based on the cost of importation plus other logistics of distribution, and, of course, the profit margin by the importer.
”This market is deregulated and is open to all participants. When I was in Lagos, we had about 56 marketing companies that have applied for and obtained licences to import.
”Out of those, 10 of them have indicated to supply within the third quarter which is July, August and September. And out of those already, we have received some cargoes from some of these marketers.”
Nigerians woke up on Tuesday, July 18 and were shocked to realise that the price of petrol had been adjusted at fuel stations across the country, including those of NNPCL.
In Lagos, the NNPC filling stations and major marketers like TotalEnergie are now selling the product at N570 per litre, up from N488 per litre, while independent marketers are selling it at N600 per litre and above, from N500-N520
In Abuja, the pump price of petrol is N617 at NNPC and some major marketers filling stations, while it is as high as N700 per litre and above at filling states in the South-south, South-east, North-central, North-west, North-east, and even the South-west.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.