The recent price hike announced by the Petroleum and Pipelines Marketing Company (PPMC) has been described as the effects of market forces which experts and stakeholders say is good for the industry and the consumers in the long run.
Stakeholders in the industry, who explained the development leading to the price increase in the pump price, said Nigerians will soon begin to experience the benefits of deregulation as government has decided against fuel subsidies in the sector.
A major player in the sector and an independent marketer, Mr. John Agidigan, explained that before this increase, market forces had forced the price per litre down to N121 before, then up to N131 and later N148.
He said the price is expected to rise and fall in reaction to the dictates and swings in the demand and supply of the products.
According to him, the new deregulated regime will always ensure the availability of the product in the market at affordable price based on the supply, adding that this regime is better that when Nigerians had to contend with, in the past, extreme scarcity and its attendant challenges as experienced before this change of policy.
Another official of workers union, Aggrey Koleijo, said Nigerians must consider the benefits of the new pricing regime than reacting to the price increase alone, which is only for the immediate.
He stated that the same market forces that brought about price reduction not long ago is still responsible for the hike and can still ensure the reduction, depending on the activities within the industry based on demand and supply.
Also, an oil analyst, Dr Mac Udiewe, said the price of fuel would surely go down in a few months’ time if one put into consideration that supply of the product would increase geometrically with the volume of increase in supply when the private sector players, including Dangote Petroleum and others, come on stream.
He also said it was good that the Federal Government made no provision for subsidy for oil markets in the budget, adding that this was a continuous drain-pipe by marketers as they concocted humongous figures for fuel which was hitherto never supplied nor distributed to market chain.
He said continuing with the subsidy regime would not have only been antithetical with the anti-corruption agenda of the President Muhammadu Buhari administration, but also injurious to the economy.
Other stakeholders, who responded, were unanimous in saying that consumers will enjoy when the industry stabilises and prices begin a downward trend as experienced recently.
Indeed, the PPMC, in August, announced an ex-depot price of N138.62k for PMS. The September price had an increment of N12.94k.
It would be recalled that the PPMC, a subsidiary of the Nigerian National Petroleum Corporations (NNPC), has announced a new ex-depot price of N151.56k for premium Motor Spirit (PMD) also known as petrol.
It disclosed this in a memo signed by D.O Abalaka of Ibadan Depot to all stakeholders on Wednesday.
The memo with ref number PPMC/IB/LS/020 reads” please be informed that a new product price adjustment has been effected on our payment platform.
“To this end, the price of Premium Motor Spirit is now N151.56k per litre. This is effective September 2, 2020.”
