The Petroleum Products Pricing Regulatory Agency, PPPRA, says it is engaging the Central Bank of Nigeria, CBN, to determine the applicable foreign exchange rates for the importation of petroleum products into the country.
The PPPRA Executive Secretary, Abdulkadir Saidu, said in a statement issued in Abuja on Monday that the engagement was also to ensure modalities for accessing the applicable foreign exchange window by the marketers.
“The agency is engaging the CBN to determine the applicable foreign exchange rates for the importation of petroleum products and modalities for accessing the applicable foreign exchange window by the marketers.
“This rate is reflected on the pricing template to determine the expected open market price of the product.
“This means that going forward, the guiding price to be advised will be determined based on the rates quoted by the CBN,” he said.
According to him, the price is expected to guide the sale of Premium Motor Spirit, PMS, in Nigeria.
He noted that the agency planned to extend the same pricing mechanism to DPK (kerosene) and AGO (diesel), among other products.
According to Mr Saidu, the essence of the price band is to ensure price efficiency that will be beneficial to both the consumers and oil marketers.
“Price liberalisation is when Expected Open Market Prices (EOMP) prices are completely determined by market forces.
“Under price liberalisation, petroleum products prices will be adjusted, in line with market realities.
“It is pertinent to state that it is crucial to have a robust regulation in place in a market-based pricing regime in order to protect the interest of the consumers and the nation, and ensure the growth of the sector.
“The PPPRA, being the regulatory agency, will continue to carry out all its mandates as enshrined in its establishment Act, which include: to determine the pricing policy of petroleum products and regulate the supply and distribution of petroleum products.
“Other mandates are: to create an information databank and moderate volatility in petroleum products prices, while ensuring reasonable returns to the operators,” he said
The executive secretary listed other functions of the agency to include: establishing parameters and codes of conduct for all operators in the downstream petroleum sector and maintaining constant surveillance over all key indices relevant to pricing policy.
He said that the agency was also empowered to periodically approve benchmark prices for all petroleum products and prevent collusion and restrictive trade practices that were harmful to the sector.