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  • PPPRA explains ambiguity in deregulation of petrol pump price

    PPPRA explains ambiguity in deregulation of petrol pump price

    The Petroleum Products Pricing Regulatory Agency (PPPRA) says it is no longer fixing the pump price of Premium Motor Spirit (PMS) also known as petrol for marketers.

    PPRA Executive Secretary, Mr Saidu Abdulkadir made this known in a statement in Abuja on Sunday.

    Abdulkadir, however, said the agency would constantly, on a monthly basis, develop a guiding price for the commodity, with which it would advise marketers.

    He noted that the deregulation of the downstream sector was dependent on the enforcement of appropriate laws by strong regulatory agencies, hence its continued intervention.

    “For the purpose of emphasis, let me reiterate that different sectors of the polity operate under the guidance of national regulators.

    “The Central Bank of Nigeria (CBN) regulates the banks and the financial sector; Nigerian Communication Commission (NCC) regulates telecommunications; National Insurance Commission (NAICOM) regulates the insurance sector and the same exists for operators in Nigeria’s downstream petroleum sector.

    “To this end, it is not out of place for the Agency to provide a guiding price band with the aim to protect consumers against price gouging.

    “It is important to also state that there is no where in the world that deregulation means total lack of control, supervision or oversight.

    “While the Market-Based Pricing Regime is a policy introduced to free the market of all encumbrances to investment and growth, it should not be misconstrued to mean a total abdication of government’s responsibility to the sector and citizenry,” he said.

    Abdulkadir said that the PPPRA no longer fix prices, but rather provide a guiding price band by monitoring petroleum products prices daily.

    This, he said was being done using the average price of the previous month to determine prices for the following month, for appropriate cost-reflective pricing that ensures reasonable returns to Oil Marketing Companies (OMCs).

    “This methodology is in line with international best practices which range from bi-monthly to monthly price reviews.

    “Nigeria adopted the monthly review model considering the average duration for the importation of petroleum products into Nigeria from the closest spot market; North West Europe (NWE) to West Africa (WAF) is about 30 days.

    “This period encompasses the Import Financing Process to delivery at retail outlets,” he added

    He further said that the new pricing regime would encourage oil marketers to resume supply of PMS, leading to further value creation in the downstream; foster job creation and ensure reasonable returns for investors.

    According to him, it will create healthy competition among marketers, enhance value for consumers and make funding available for other important infrastructure.

    He said that the PPPRA would continue to regulate the downstream petroleum industry, irrespective of the deregulation of the sector.

    Abdulkadir said this would also prevent petroleum products marketers from exploiting consumers and help to enforce the appropriate laws guiding the industry.

    On code of conduct for oil marketers, he said that although crude oil price and petroleum products prices were positively correlated, the prices of petroleum products do not increase or reduce correspondingly with changes in crude oil price.

    He noted that the pump price will be a reflection of the international market prices of petroleum products that were also rising.

    Abdulkadir further stated that in line with its laws, the PPPRA developed Guidelines for Petroleum Products Commercial Framework and was drawing up Code of Conducts for Operators in the new pricing regime.

    He also added that the PPPRA was finalising the review of cost elements and profit margins on the pricing template for marketers, to reflect the current market-driven pricing regime which was last reviewed in 2016.

  • PPPRA clarifies stand on petrol price cap

    The Petroleum Products Pricing Regulatory Agency (PPPRA) says it will continue to advise oil marketers on the pump price of the Premium Motor Spirit (PMS), generally known as petrol.

    The agency, in a statement by its Executive Secretary, Abdulkadir Saidu on Sunday in Abuja, said that marketers were not allowed to fix prices of products.

    He said the publication that the agency had removed the price cap of PMS, giving marketers the freedom to fix the price of the commodity and sell above the stipulated price, was not correct.

    He recalled that the removal of PMS price cap and implementation of a market-based pricing regime was first announced by the Minister of State for Petroleum Resources, Chief Timipre Sylva, in March 2020.

    This, he said, was followed by PPPRA’s publication announcing the regulation on the market-based pricing regime, thus creating a legal framework for the policy.

    “The published regulation does not confer on marketers, the power to fix prices for the product as they deem fit. A guiding price will always be advised by the PPPRA according to market realities.

    “The agency shall monitor market trends and advise the NNPC and Oil Marketing Companies on the monthly market-based guiding price which shall include the indicative retail price at which the product shall be sold across the country,” he said.

    Saidu further noted that Sylva had said that the Federal Government would continue to monitor the price of petroleum products and advise on monthly guiding prices that guaranteed reasonable returns to operators while ensuring consumers paid appropriate prices in line with market reality, and were not overcharged.

    “The minister, in his statement, further stressed that the government’s role in a deregulated economy was to provide, through the operation of the petroleum products pricing regulatory agency, a pricing mechanism to create a market-driven price regime.

    “For the avoidance of doubt, it is instructive to state that no private individual or group has the mandate to fix prices of petroleum products.

    “It is the statutory regulatory body that is saddled with the responsibility of advising guiding prices. In a deregulated market, the role of a regulator in monitoring and regulating activities in the sector cannot be over-emphasised,” he pointed out.

  • Petrol price: FG urged to enforce holistic industry reform

    Petrol price: FG urged to enforce holistic industry reform

    A coalition of Civil Society Organisations (CSOs) has called on the Nigerian government to enforce a holistic reform in the country’s oil and gas industry.

    The CSOs, comprising of 13 different organisations working to promote transparency and accountability in the industry made the call in a communique following developments in the sector.

    They observed that the immense fiscal pressure Nigeria is under as a result of low crude oil prices can only be reduced through the urgent implementation of critical reforms.

    Recall that in response to the economic downturn, Nigeria has implemented a few policy measures including the review of the Federal Government 2020 budget Benchmarks and cut of the overall approved appropriation Act by N1.5 trillion, in addition to announcement of fuel subsidy removal.

    Also, on Thursday, the Petroleum Products Pricing Regulatory Agency (PPPRA) announced the removal of the cap on the price of Premium Motor Spirit (PMS) also known as petrol.

    The PPPRA said it would continue to monitor trends in the crude oil market and advise the Nigerian National Petroleum Corporation (NNPC) and oil marketers on monthly guiding price for the commodity.

    However, the organisations which include Nigeria Natural Resource Charter (NNRC), Budgit, Media Initiative for Transparency in Extractive Industries (MITEI), considered these measures to be inadequate, urging the federal government to enforce a holistic industry reform.

    In the communique, they recommended the privatization of the country’s four refineries in their present condition to avoid further revenue losses.

    “We suggest the adoption of a transparent merit-based model for privatization… We encourage the government to adopt favourable fiscal terms that bring about a renewed investors’ confidence and also help fast track the proposed 29+ refineries, which still have valid operating licenses,” the communique reads.

    To clear the present confusion relating to fuel subsidy removal, the group urged the government to lay out defined processes and regulatory guidelines to support the announced removal of fuel subsidy.

    “These should be pushed forward and announced by the Presidency and the Minister of Petroleum Resources to give the policy an official seal of affirmation to all Nigerians that we are not in another false expedition,” the communique reads.

    Recall that the Group Managing Director of the NNPC, Mr. Mele Kyari, had on April 8, 2020 announced an end to fuel subsidy regime. But there has been no clear policy guideline in this direction since the announcement.

    Consequently, to commit to the sustainability of the no-subsidy regime, the CSOs emphasised the need to give the GMD’s policy statement legal backing either through a stand-alone legislation, or through appropriate clauses integrated into the Petroleum Industry Bill (PIB).

    According to the CSOs, there is also the need for the government to transition the PPPRA and the Petroleum Equalisation Fund (PEF) into new roles to ensure the sustainability of the proposed ‘non-subsidy policy’.

    “Repeal of the PPPRA and PEF(M)B Act and transition them into efficient and competent institutions to support the reforms encapsulated in the proposed PIB are possible options to consider,” they stated.

    Furthermore, to guide against exploitation of Nigerians when the downstream sector is fully liberalised, the CSOs urged the government to prepare for a post-price regulation era by prioritizing consumer protection.

    “The interests of the people should not suffer exploitation in the hands of profiteering marketers. We suggest anti-trust or competition propositions using the Federal Competition and Consumer Protection Act 2019,” the CSOs stated.

    With regards to the role of the National Oil Company, the CSOs advised against giving the NNPC any advantage, whether comparative or competitive, over other petroleum products marketers in terms of access to foreign exchange for products importation, to create a level playing field.

    “If the NNPC must remain a player in the market, it must strive to operate under the same conditions and rules as other players in the sector regulated only by the prevailing market forces and competition,” the communique stated, adding that while the industry awaits passage of the PIB, steps should be taken to delineate the roles of policy formulation, regulation and enforcement as well as operation in the Nigerian oil and gas industry.

    Other organisations which signed the communique include Civil Society Legislative Advocacy Centre (CISLAC), Women in Extractives, Connected Development (CODE) and Spaces for Change, amongst others.

  • PPPRA removes price cap on petrol

    PPPRA removes price cap on petrol

    The Petroleum Products Pricing Regulatory Agency (PPPRA) has removed the cap on the price of Premium Motor Spirit (PMS) also known as petrol.

    The agency made the disclosure in a document it released in Abuja on Thursday entitled, ‘’Market Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020’’.

    It said in the document signed by its Executive Secretary, Mr Abdulkadir Saidu, that, henceforth, the price of PMS would be determined by market forces.

    It said that it would continue to monitor trends in the crude oil market and advise the Nigerian National Petroleum Corporation and oil marketers on monthly guiding price for the commodity.

    The agency said that it made the regulations with the approval of the President Muhammadu Buhari.

    “From the commencement of these regulations, a market-based pricing regime for Premium Motor Spirit (PMS) shall take effect.

    “The agency shall monitor market trends and advise the NNPC and oil marketing companies on the monthly guiding Market-Based Price.

    “The price of Premium Motor Spirit (PMS) advised by the agency shall be guiding retail price at which the product shall be sold across the country.

    “The regulations may be cited as the Premium Motor Spirit (PMS) Market Based Pricing Regime Regulations, 2020, made this 20th day of March, 2020,” it said.

    According to the agency, the regulations seek to complement and enforce the provisions of the PPPRA (Establishment) Act, 2003, and to notify the general public of the existence of a market-based pricing regime for PMS with effect from March 2020.

  • Marketers speak on new price of petrol

    The Independent Petroleum Marketers Association of Nigeria (IPMAN), has called on its members to immediately comply with the recent reduction in the price of Premium Motor Spirit (PMS).

    The call followed the recent new price announced by the Petroleum Products Pricing Regulatory Agency (PPPRA), Alhaji Bashir Danmalam, the Chairman of the association in Kano, in a press statement on Tuesday in Kano.

    According to him, all marketers under my jurisdiction should immediately comply with the new price modulation advice by making sure no one sells above the approved ceiling of N123.50 per litre.

    He further assured the public of a steady supply and distribution of petroleum products at all times and in all circumstances.

    Danmalam also commended the Federal Government for the development, and ensuring stable supply and distribution of the product, despite the lockdown occasioned by the COVID-19 pandemic.

    He further prayed to God to bring the end of the challenge, while advising both the public and marketers to continue to observe all public health measures of personal hygiene and social distancing.

    Recently, PPPRA, had announced a slight reduction in the pump price of the PMS in the country. In a memo containing the new price guideline for the month of June, titled ‘A.4/9/017/C.2/IV/70131’, the PPPPRA pegged the petrol pump price band between N121 to N123.50 per litre.

    According to the agency, the ex-depot price band is now N100.13 and N108.13 per litre while ex-depot for collection is N108.78 and N111.78 per litre.

  • Why we shunned FG order to reduce pump price from N125 to N123.50 – Fuelling station operators

    …say we must exhaust old products first

    …insist sales has been poor due to lockdown

    …as crude oil prices continue to summersault

    Fuelling station operators on Tuesday said they shunned Federal Government directive to reduce pump price of fuel from N125 to N123.50 per litre because their old stock has not been exhausted.

    Recall that the apex petroleum products regulatory body had announced a new price regime on April 1.

    The Petroleum Products Pricing Regulatory Agency (PPPRA) apparently sensing the effects of the lockdown announced further reduction of the pump price of Premium Motor Spirit (PMS) also known as petrol from N125 to N123.50k per litre.

    The agency made the announcement in a statement signed by its Executive Secretary, Abdulkadir Saidu, in Abuja.

    A survey conducted by TheNewsGuru.com, (TNG) in Abuja clearly indicates a clear disregard for the new price regime as the operators refused to adjust their meters.

    In a bid to get a clearer picture of the situation, TNG visited filling stations in Zuba, Jikoyi, One man village, Dede, Kubwa, Abuja Kaduna express road and Orozo axis in the Federal Capital Territory, FCT and the pump price remained N125per litre.

    In a chat with filling station fuel attendants, TNG discovered that the response was like a prepared script”we have not finished our old stock they all chorused.

    Asked whether they were not scared of Department of Petroleum Resources, DPR, officials, one of the attendants told TNG”for this lockdown make dem come now we de wait.

    “We go tell dem say na old products we get and how many people de buy fuel these days even people no de buy for Jerry cans again as NEPA don de try now.

    “We no de run shifts again because there’s no need oh as nobody kuku de come buy like before.

    The most revealing in this report is that NNPC Petroleum sales outlets failed to respect the FG directive as they also refused to adjust their meters.

    As at on Monday this week the price of crude oil in the international market has continued to tumble.

    This could further lead to reduction of pump price by May 1 but will the powerful filling station operators obey? This is a question for another day.

  • Open market price of petrol crashes to N114.53 per litre – PPPRA

    The Petroleum Products Pricing Regulatory Agency (PPPRA) said the Open Market price of Premium Motor Spirit( PMS) also known as petrol, in the Nigerian market has dropped to N114.53 per litre.

    The Agency disclosed that petrol is now valued at N114.53 per litre from the Pricing Template for the commodity, released in Abuja, on Wednesday.

    The agency, however, did not say when there will be a review of fuel price at the pump. It is at present sold for N145 per litre.

    Giving a breakdown of the PMS pricing template, the PPPRA disclosed that cost plus freight of PMS to Nigeria stood at 379.37 dollars per metric tonne, an equivalent of N86.84 per litre.

    It added that the lightering expenses stood at N2.75 per litre and Nigerian Ports Authority (NPA) charges stood at N0.84 per litre.

    “Nigerian Maritime Administration and Safety Agency (NIMASA) charges stood at N0.22 per litre; jetty throughput charge N0.60; storage charge N2; and financing cost N1.92; putting the landing cost of PMS at N95.16 per litre,” it noted.

    Adding the total distribution margins of N19.37 per litre to the landing cost of N95.16 per litre, the agency put the Expected Open Market Price ( EOMP) of the commodity at N114.53 per litre.

    The template also revealed that the ex-depot price of the commodity, which was the price at which the NNPC sold to oil marketers, currently stood at N125.63 per litre; while the Ex-depot price for collection stood at N133.28 per litre.

    The PPPRA explained that Ex-depot for collect price comprised, ex-depot price, inclusive of bridging allowance, Marine Transportation Allowance (MTA), and an administrative charge.

    The EOMP of the commodity had risen to N116.22 per litre as on Monday, March 9, 2020, before dropping by 1.45 percent to N114.53 per litre on Tuesday.

  • Fuel subsidy gulped N43.09bn in one month – PPPRA

    Fuel subsidy gulped N43.09bn in one month – PPPRA

    The Petroleum Products Pricing Regulatory Agency (PPPRA) has disclosed that the federal government paid a total of N43.09 billion as fuel subsidy on Premium Motor Spirit (PMS) or petrol in the month of January 2020.

    This means that in January, the government paid an average N26.27 on every litre of the commodity to enable Nigerians buy the product at a pump price of N145 per litre, while at N171.27 per litre at the Expected Open Market Price (EOMP).

    In its monthly PMS Pricing Templates and Daily Truck-Out data, the agency stated that the amount paid for subsidy was lower by 22.5 percent compared with amount paid in December 2019, N55.6 billion.

    With a total of over 1.6 billion litres of petrol supplied in the month, the federal government subsidy of N26.27 means a total of N43 billion was expended as subsidy in the first month of the year.

    PPPRA noted that the total amount expended as subsidy on PMS in January represented 9.58 percent of the N306 billion budgeted for fuel subsidy in the 2020 budget of the federal government.

    Giving a breakdown of the EOMP and its subsidies, it was revealed that for January 2, 3, 6, 7, 9 and 10; EOMP of PMS stood at N182.05 per litre, N182.28 per litre, N183.50 per litre, N179.50, N172.93 per litre and N174.52 per litre respectively, translating to subsidy of N37.05 per litre, N37.38 per litre, N38.50 per litre, N34.50 per litre, N27.93 per litre and N29.52 per litre.

    For January 13 to 17, EOMP of PMS stood at N173.89 per litre, N173.95 per litre, N172.49 per litre, N173.81 per litre and N171.77 per litre respectively; leading to subsidy of N28.89 per litre, N28.95 per litre, N27.49 per litre, N28.81 per litre and N26.77 per litre respectively.

    In addition, EOMP of N172.76 per litre,N173.84 per litre, N170.60 per litre, N167.56 per litre and N163.75 per litre were recorded from January 20 to 24, translating to subsidy of N27.76 per litre, N28.84 per litre, N25.60 per litre, N22.56 per litre and N18.75 per litre respectively.

    While for December 27 to 31, the Federal Government incurred subsidy of N14.86 per litre, N17.53 per litre, N18.49 per litre, N16.15 per litre, and N15.45 per litre respectively, from EOMP of PMS of N159.86 per litre, N162.53 per litre, N163.49 per litre, N161.15 per litre and N160.45 per litre.

    Now, with a decline in the prices of crude oil at the international market in February 2020 caused by coronavirus spread, it is believed that the subsidy paid for the month should be lower.

  • Presidency clears air on Buhari’s daughter’s ‘fraudulent employment’ at PPPRA

    Presidency clears air on Buhari’s daughter’s ‘fraudulent employment’ at PPPRA

    The presidency on Wednesday described as Fake News an online report that Zahra, daughter of President Muhammadu Buhari, has fraudulently secured a job with the Petroleum Products Pricing Regulatory Agency (PPPRA).

    A statement issued by Femi Adesina, Special Adviser to the President on Media and Publicity, said the report was fake.

    “While Zahra, just like any other Nigerian, can work wherever she secures employment, we hasten to add that the story is false in every material particular.

    “The publication is untrue, malicious, and meant to cast aspersions at the First Family, since the tendentious platform claims the job was secured fraudulently.

    “All people of goodwill are enjoined to ignore the hack piece, masquerading as a news story,” the statement said.

  • PPPRA failed to remit N501m in 2014, says DFA

    PPPRA failed to remit N501m in 2014, says DFA

    Mr Peter Joshua, the Director of Finance and Administration, Petroleum Products Pricing Regulatory Agency (PPPRA) has admitted that the agency failed to remit N501.2 million into the Federation Account in 2014.

    The revelation stunned members of House of Representatives Committee on Finance at an investigative hearing on Monday in Abuja.

    Joshua told the committee that the agency generated N2.8 billion in 2014 and should have remitted N708.6 million which represented 25 per cent of its Internally Generated Revenue in line with the law.

    He, however, admitted that the agency remitted only N207.7 million leaving a difference of N501.2 million unmerited.

    Joshua explained the amount was largely generated from the 15 kobo charged on every liter of fuel imported or refined locally.

    The Chairman of the committee, Rep. James Faleke (APC-Lagos), demanded all relevant documents showing revenue generation and remittances from 2011 to date.

    Faleke ruled that the management should appear before the committee with all the relevant documents on Feb. 27.

    He said that the committee noticed a lot of irregularities in the revenue generation and remittances of the agency.

    The legislator said that the Auditor General’s report on the agency was “damning” as there were queries yet to be answered.

    According to him, it would not be business as usual as there was a new Sheriff in town, “we are looking for money to fund 2020 budget.”

    “Furnish this house with the agency’s financial statement from 2011, the audited accounts, outstanding debts, all documents showing reconciliation with NNPC, details of all contracts awarded and copies of products certification,” he said.