Fresh reports making the rounds indicate that the Federal Government is into an alleged secret deregulation of the downstream sector of the petroleum industry which would take effect any moment from now. According to information gathered, the deregulation move will swing the official price of Premium Motoring Spirit, PMS known as petrol, to over N100 per litre.
Calculations revealed that the hike would make a minimum of 27.17 percent increase in fuel price nationwide, the officials who begged anonymity have said. The deregulation policy, they say, is likely to push the pump price of petrol to about N110 per litre at NNPC-owned filling stations and higher at other independent outlets.
However, they revealed that no formal announcement of the increment would be made by FG for fear of backlashes from the masses. Industry sources familiar with the plan said government is at the stage of giving secret permission to petroleum products marketers to gradually adjust their pump prices as early as midweek as a formal take-off of deregulation in the country.
The sources said government decided to take such drastic decision to end fuel scarcity crises and avoid subsidy payments. The sources also alleged that government appeared to have successfully convinced organised labour and its affiliate unions to its side. Pushing for reaction, Business Times put a call through to the General Secretary of the Nigeria Labour Congress, NLC, Peter Ozo-Eson but he did not respond to calls and text message. Also, the acting Executive Secretary, PPPRA, Sotonye Iyoyo, did not respond to calls, and a text message. NNPC spokesperson, Garbadeen Mohammed, said he was unaware of the planned introduction of deregulation by government. Deregulation of the oil sector has been clamoured for by the private sector as solution to fuel scarcity in the country.
Deregulation allows both the government and privates to share the burden of oil production and allow market forces of demand and supply determine the prices of petroleum products. Until January this year when the price of crude oil at the international market dropped to less than $28 per barrel, government was paying subsidy in multiples of billions of Naira annually throughout the period of high oil prices. With the introduction of price modulating mechanism by government, for the first time, marketers had to refund to the PPPRA costs recovered for importing fuel at a landing price lower than government approved price band of N85.50 per litre for NNPC mega stations and N86 for other stations.