Executive Secretary, the Petroleum Products Pricing Regulatory Agency (PPPRA), Abdulkadir Saidu, has said Nigerians should be ready to pay high or low prices for petrol following the price liberalisation scheme currently in place.
He made this known while answering questions on the new PMS price regime in Nigeria noting that efforts were being made to develop alternative fuels to the PMS by deepening the utilisation of Liquefied Petroleum Gas/Compressed Natural Gas as auto gas in Nigeria.
Saidu said this would come into fruition in the medium term and would help to cushion the effect in case of a situation of high oil price.
“What we have in place is a market reflective pricing system. Petroleum products prices will be adjusted in line with market realities and the result is what we see presently with prices on the downward slide,” he stated.
“Accordingly, price will naturally be adjusted to reflect a true picture of market fundamentals at any particular period, high or low.
“The agency is engaging with the CBN to determine the applicable forex rates for the importation of petroleum products and modality for accessing the applicable forex window by 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.
“Going forward, pricing of the PMS will reflect market fundamentals. The PPPRA will continue to monitor price trends and advise monthly guiding price for all petroleum products, based on prevailing market realities and other pricing fundamentals.
“Furthermore, the plunge in global crude prices made it increasingly difficult for government to finance the 2020 national budget as it was predicated on a crude price of $57 per barrel.
“The low crude oil prices, therefore, presented the opportunity to address the lingering challenges associated with the under/over-recovery regime and free up vital funds required to develop other key sectors of the economy.”