IPMAN and N700 per liter, By M.S. Ingawa
AREWA AGENDA – Nigerians need to understand that subsidy removal means complete deregulation of the sector. When something is deregulated it means it is no longer under regulation. Petrol prices are no longer under regulation by anybody, state or non-state body.
The government body responsible for regulating Prices is the Nigerian Midstream and Downstream Petroleum Regulatory Authority through the Petroleum Equalization Fund (PEF). The removal of the subsidy has stripped NMDPA of that right to regulate the price or the need to operate the PEF.
Petrol prices will now be determined by market forces like every other deregulated commodity.
Independent Petroleum Marketers Association of Nigeria (IPMAN) is just an independent body of Petroleum marketers like every other independent body that can only set prices for their members. They CANT set the price. They can only influence the supply chain.
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NMDPRA has issued 6 companies with PMS Import Licenses. Everything about the price of PMS will now depend on these 6 companies. And they can never have a fixed price. Because the aggregate factors that inform the price are dynamic.
The 6 companies are authorized to import PMS from any refineries in the world subject to meeting Nigeria’s quality standards. Nigeria imports PMS primarily from the Netherlands, Belgium, Norway, India, and the UK in that order. The companies have at least the above options and more. And may not get from these countries at the same price.
The pump price will largely depend on the Global Crude Price, Cost of Sea Transportation and Handling, Import Charges, Margin (importers), Logistics (in ln land), and Margin of distributors and retailers. So it’s practically impossible for the petrol price to be fixed even for one week.
Nigerians are so used to the regulated PMS Market. Hence, the curiosity to know the exact price. But the reality before us is that the price will fluctuate from time to time. It can be below or above your expectations just like every other commodity in the market BUT can never be fixed.
