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Controversial Demand: Oil Marketers Push for Even Higher Petrol Prices

Oil marketers are pushing for market indicators to govern the pricing of Premium Motor Spirit (PMS), commonly known as petrol, even if it means prices could potentially surge to N700. This follows a significant 165 per cent increase in petrol prices to N500, which occurred after President Bola Tinubu’s announcement regarding the removal of subsidies for the product. This situation has drawn concerns from industry players and has triggered projections of further price reviews.According to oil marketers, the current petrol prices in Nigeria do not accurately reflect the market conditions. To address this, some filling stations operated by the Nigerian National Petroleum Company Limited adjusted their pump prices from N537/litre to N617/litre across the country recently.Tunji Oyebanji, a former Chairman of the Major Oil Marketers Association of Nigeria and CEO of 11 Plc, stressed that petrol prices should align with market realities and be comparable to neighboring African countries that import petrol. He pointed out that some neighboring countries already sell petrol at higher prices than Nigeria, indicating that the current disparity might not be as significant as perceived.The National Controller of Operations, Mike Osatuyi, predicted that the price of petrol could likely increase further to N600/N700 and beyond, depending on various factors such as the exchange rate and international crude prices. Osatuyi emphasized that this current price is considered a “transitional price,” and expectations are high for a roadmap from the Federal Government following the removal of subsidies.However, there are concerns among industry experts that if market forces are not allowed to dictate prices, smuggling and diversion of petrol to neighboring countries might resurface. Additionally, the recent devaluation of the naira has contributed to the complexities of the situation, making it challenging for Nigeria to benefit from the drop in global oil prices experienced by countries with stronger currencies.Amidst these developments, various perspectives exist on whether full deregulation of the downstream sector is the right path for Nigeria’s economy. Critics argue that the country’s weak economy and devalued currency might not be conducive to full deregulation, while others advocate for increased domestic refining capacity to ensure fuel availability.In summary, the clamor for petrol price determination based on market indicators persists among oil marketers in Nigeria. The situation is complex, with concerns about the impact on the economy and the need to strike a balance between market forces and government interventions. As the situation unfolds, industry players and the government will have to navigate these challenges to ensure a sustainable and stable fuel pricing system.


Ademola Adeyemi

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