Fuel market chaos: Major marketers demand full deregulation
- NNPC siphons susbidy funds as prices escalate
Sopuruchi Onwuka
The group of major petroleum marketers in the country has demanded government to embark on full deregulation of the market, given the weakness of regulators in controlling price surge and subsequent distortions in the uniform price policy.
The Major Marketers Association of Nigeria (MOMAN) in a statement on Friday stated that whereas its members continue to conform to regulated price band of N165 per liter to N170 per liter, prices the wider market environment continues uncontrolled.
Survey by The Oracle Today showed that the subsidized premium spirit also called petrol sell at different prices across the different zones of the country with prices ranging from N265 per liter in some parts Lagos to as high as N350 per liter in Southeastern parts of the country.
The sitution has led to astronomical jumps in transportation costs, translating to cost of products and services as inflation gallops and the Naira weakens.
Meanwhile, the Nigerian National Petroleum Company (NNPC) Limited continues to make full subsidy withdrawal for every liter of the product sold in the country. Thus whereas money huge funds are siphoned at the supply end, the fuel consumers in the domestic market continue to pay the market determined prices.
The presidential candidate of the Labour Party in the upcoming February polls, Mr Peter Obi, had in the week described the fuel subsidy system in the country as syndicated fraud, vowing to dismantle it for more palpable and transparent social welfare packages if elected by Nigerians.
MOMAN stated that it would continue to use its best endeavors to ensure that product is sold at the pump at prices currently approved by the regulatory authorities, “despite pressure on price by demand and costs in our immediate operating environment.”
It reiterated that “a final resolution to these challenges will be the full deregulation of the petroleum downstream sector to encourage liberalization of supply and long-term investments in distribution assets”.
“We urge the government to work towards this end goal,” the group of big market players declared.
MOMAN expressed sympathy with Nigerians over the challenges in the purchase of petrol at filling stations across the country.
The situation, The Oracle Today reports, results from loss of regulation in the market where operators of retail outlets bearing the brands of both major and independent marketers determine prices each morning, causing motorists to crowd at low price stations and causing fuel queues.
The group attributed the chaos in the market to “exceptional high demand and bottlenecks in the fuel distribution chain, shortage and high dollar costs of daughter vessels for ferrying product from mother vessels to depots along the coast, and inadequate number of trucks to meet the demand to deliver product from depots to filling stations nationwide.
“These high logistics and exchange rate costs continue to put pressure on prices at the pump,” MOMAN stated.
To ease supply bottlenecks, MOMAN pledged “to extend depot loading hours as well as keep strategically situated service stations open for longer hours to ease access to fuels for our customers.”
