The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has acknowledged the financial strain caused by the recent increase in the pump price of Premium Motor Spirit (PMS), commonly known as petrol.
The authority said it is aware of the impact of the price increase on households, transport workers and businesses across the country.
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In a statement issued on Saturday, the NMDPRA said it remains committed to ensuring that consumers are protected within the framework of Nigeria’s deregulated petroleum market.
“We are fully sensitive to the pressure this places on households, transport workers, and businesses across the country, and we share in the commitment to seeing relief take root as market conditions stabilise,” the authority said.
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The statement comes as petrol prices have risen above N1,400 per litre in several parts of the country.
Nigeria exposed to global oil shock
The latest increase followed an N85 adjustment in the gantry price of petrol by the Dangote Petroleum Refinery, from N1,265 to N1,350 per litre, amid a surge in international crude oil prices.
A survey of filling stations in Abuja on Saturday morning showed significant variations in pump prices, with some outlets selling petrol for between N1,400 and N1,450 per litre.
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This compares with prices of about N1,200 to N1,300 per litre recorded at several outlets in the previous month.
The latest increase came after a period of easing in petrol prices following expectations that the conflict in the Middle East would de-escalate and disruptions to shipping through the Strait of Hormuz would ease.
Although Nigeria is a major crude oil producer, the country remains exposed to developments in the international oil market.
Changes in global crude prices can affect the domestic petroleum market through the cost of crude feedstock, refined products, freight and other supply-chain expenses.
The increase in Dangote Refinery’s wholesale petrol price has consequently translated into higher prices at filling stations.
Brent crude, the international benchmark relevant to Nigeria’s oil market, closed at $104.87 per barrel on Friday, according to Reuters.
The disruption of shipping through the Strait of Hormuz has become a major concern for global energy markets because the waterway is a critical route for crude oil and refined-product shipments.
For Nigeria, developments in the international oil market can feed into the cost of transportation, logistics, electricity generation and other economic activities dependent on petroleum products.
‘We don’t fix petrol prices’
The NMDPRA said its role in the downstream petroleum sector is governed by the Petroleum Industry Act (PIA) 2021.
It said Section 205(1) of the Act provides that wholesale and retail prices of petroleum products shall be based on unrestricted free-market pricing conditions.
“The Authority does not fix pump prices or issue administrative price templates,” it said.
According to the authority, Sections 205(2)-(4) restrict government intervention in petroleum-product pricing to exceptional circumstances where there is formal evidence of a declared market failure.
“No such market failure has been declared,” the authority said.
It added that Section 216 of the PIA empowers it to prevent anti-competitive practices, price-fixing and abuse of market dominance.
READ ALSO: CPPE urges NMDPRA to tie petrol imports to verified supply gaps
The authority also said it was working with the Nigeria Customs Service and other security agencies to strengthen surveillance along border corridors.
The move, it said, is aimed at improving supply stability and curbing the illegal cross-border diversion of petroleum products.
The NMDPRA stressed that deregulation does not exempt petroleum operators from regulatory compliance or fair-trade standards.
It said it was working with the Federal Competition and Consumer Protection Commission (FCCPC) under a formal memorandum of understanding to monitor the market.
The agencies are jointly monitoring for alleged price-gouging, collusion, under-dispensing and compromised product quality, the NMDPRA said.
The authority also said it was opening dedicated feedback and reporting channels through which members of the public and industry stakeholders can report irregular pricing and exploitative trade practices for investigation and enforcement.
The NMDPRA said it remained committed to its statutory mandate of ensuring energy security, promoting fair competition and protecting consumers within the legal framework of the PIA.
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