Major Oil Marketers Association of Nigeria (MOMAN) says its members lost about N3.5 billion to the reduction in fuel price. This was even as it decried the latest price cut, the second in less than a month after the last review on March 19, 2020.
The Executive Secretary of Petroleum Products Pricing Regulatory Agency (PPPRA), Abdulkadir Saidu, had said the action was in line with government approval of a new pricing regime, effective March 19 2020, which provided for the establishment of a price band within which Oil Marketing Companies (OMCs) are expected to sell at the retail stations.
‘‘Accordingly, the PPPRA wishes to further clarify the Guiding Price Band (with effect from April 1, 2020) of N123.50 per litre – Lower Band (LB), N125.00 per litre – Upper Band (UB). Members of the public and all oil marketing companies are to be guided accordingly.’’ he said
Saidu said the guiding price, which becomes effective from April 1, 2020, shall apply to all retail outlets nationwide for the month of April 2020, adding that PPPRA and other relevant regulatory agencies shall continue to monitor compliance to extant regulations for a sustainable downstream petroleum sector.
But in a swift reaction to the development, the Chairman of MOMAN, Mr. Tunji Oyebanji, in a telephone interview with Daily Sun, said the N3.5 billion revenue was what major marketers lost when fuel price was reduced from N145 per litre to N125.
Oyebanji said there are market dynamics as to how the retail segment of the downstream sector operates with a call on the PPPRA to take cognizance of such before tampering with fuel pricing. He said the latest reduction, the second in one month would have a negative effect on marketers because they would record yet another loss because majority of them would still have products purchased at the old rates in tanks while those without, would likely have placed fresh orders.
‘‘What members of the public and the PPPRA should understand is that, there are two sides to a coin and whenever, there is a fuel price increase or decrease, there are dynamics to it. When PPPRA reduces price, for those with product in their tanks they would certainly incur losses.
‘‘On the other hand, when there is a price increase, what people see as profit for marketers is not necessarily so because for those that have product in their tanks as at the time of increase, what that means is that they don’t have to look for money elsewhere when they are restocking. The gain on the new price is what they will use in making up to buy products at the new rate.’’
He said if government is not ready to deregulate the industry, it should be clear about it and let stakeholders know the direction it is taking so that they can plan and allow those that want to continue in the business remain and those that cannot remain to leave.
The Petroleum Products Pricing and Regulatory Agency (PPPRA) had on Tuesday reduced the pump price of Premium Motor Spirit (petrol) from N125/litre to N123.50/litre effective April 1. This was contained in a statement signed by the Executive Secretary and Chief Executive Officer, Abdulkadir Saidu. He said the downward review of the pump price was in line with Federal Government’s approval for a monthly review of the vital commodity.