FG Deregulates Petrol Price

The Federal government has deregulated the price of petrol in the country ,today June 4,2020.
This significant development was disclosed by the Executive Secretary of the Petroleum Products Pricing and Regulatory Agency, PPPRA ,Abdulkadir Saidu in an official statement released in Abuja on Thursday, June 4.
The statement entitled, ‘’Market Based Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020’’stated that the price of PMS would henceforth be determined by market forces.The pronouncement was however backdated to March 20,2020 which is now the official commencement date of the new policy .

PPPRA said that it would continue to monitor trends in the crude oil market and advise the Nigerian National Petroleum Corporation and oil marketers on monthly guiding price for the commodity.
The agency said that it had obtained the approval of the President Muhammadu Buhari before issuing the statement.

In addition, the statement cum policy document stated that :“From the commencement of these regulations, a market-based pricing regime for Premium Motor Spirit (PMS) shall take effect.
“The agency shall monitor market trends and advise the NNPC and oil marketing companies on the monthly guiding Market-Based Price.
The price of Premium Motor Spirit (PMS) advised by the agency shall be guiding retail price at which the product shall be sold across the country.”
“The regulations may be cited as the Premium Motor Spirit (PMS) Market Based Pricing Regime Regulations, 2020, made this 20th day of March, 2020,” it said.
Since March, when crude oil prices plunged on global markets there have been calls on the government and speculations that the Buhari administration may take the opportunity of lower refined products prices to deregulate petrol prices.The prices of other refined petroleum products sold in the country are market determined, except for PMS.
Petrol, which is by far the most widely used fuel in the country is typically sold at fixed prices, that are below market prices and have been the subject of bitter political squabbles between labour unions and government.Government watchers believe that a key motivation for the Buhari administration to deregulate petrol price is the heavy burden of petrol subsidy which costs government between N500 billion to N750 billion every year.Worse,at a time when global oil prices have fallen sharply and with government struggling hard to fill funding gaps in the budget,a cut of over N500 billion which would have been used to subsidize petrol price would offer a huge relief, one analyst says.