IPMAN has rejected a proposal by PETROAN to make fuel price reviews mandatory every six months. IPMAN argues this proposal contradicts the Petroleum Industry Act. It also does not work in a deregulated market where businesses can set their prices freely.
PETROAN Raises Concerns Over Price Reductions and Losses
PETROAN has criticized the constant reduction in fuel prices. They claim marketers are facing significant losses. This price reduction was triggered by the Dangote refinery lowering the petrol price multiple times, from N890 to N825, and now N815 per litre. NNPC and other importers followed suit, lowering their prices to remain competitive. However, filling station owners like those in PETROAN have suffered financially.
PETROAN Pushes for Price Stability
PETROAN proposes a regulation to fix fuel prices for six months. They believe this would protect investors and stabilize the market. They argue that sudden price changes cause massive financial losses, amounting to billions. The association claims these unpredictable market conditions discourage further investment in the sector. PETROAN also suggests that regulators create mechanisms to ensure price stability, ultimately benefiting consumers and investors.
IPMAN Disagrees with Price Fixing Proposal
IPMAN disagrees with PETROAN’s suggestion. Hammed Fashola, IPMAN’s National Vice President, argues that factors like crude oil prices and the exchange rate affect fuel prices. He questions how prices could remain fixed for six months if the naira appreciates. He also adds that such an approach is unrealistic and would not work.
Deregulation Encourages Competition and Lowers Prices
Fashola stresses that deregulation boosts competition, which benefits consumers. Competition encourages fair pricing and lower fuel costs. He believes deregulation creates a level playing field for importers and refiners. It allows them to operate freely, ensuring no monopolies form. Fashola notes that petrol prices have fallen from N1,000 to N860 since Dangote refinery started operations. He asks why anyone should be denied the chance to sell petrol at N700 if they can source it at that price.
The Role of Importers in Fuel Pricing
Fashola also defends importers, saying they do not get dollars from the Central Bank of Nigeria. He believes importers should be free to source foreign currency independently for fuel imports. He explains that if locally refined petrol becomes cheaper than imported fuel, importation will no longer be necessary. This would create a more efficient and competitive market.
Conclusion: Deregulation’s Benefits for the Nigerian Market
Fashola concludes that deregulation has brought positive change. It has lowered prices, encouraged competition, and reduced monopolies. He remains confident that deregulation will continue to benefit consumers and stabilize the fuel market.
