…Calls for privatization of refineries
The Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN has attributed the recent increase in Premium Motor Spirit, PMS prices to the rise in crude oil prices in the international market.
According to PETROAN, the benchmark for oil prices, Brent crude oil, stood at $80.85 per barrel, while WTI oil and the OPEC basket were priced at $78.82 and $81.72 per barrel, respectively. The prices rose to a 4-month high following the introduction of new sanctions against Russian oil by the US.
Section 205 of the Petroleum Industry Act, PIA states that petrol prices are determined by market forces, indicating that the government and NNPC no longer set petrol prices. As a result, operators of refineries in Nigeria will respond accordingly to changes in crude oil prices.
The National President of PETROAN, Dr. Billy Gillis Harry, noted that the increase in crude oil prices would inevitably affect domestic costs. “It’s no longer funny; even retail outlets owners are affected by this up-and-down dwindling of prices. It affects our business.”
Dr. Harry emphasized that PETROAN members cannot buy petrol at a higher price and sell it at a lower price. “Our selling rate always reflects our buying rate. Our members shouldn’t be blamed for the current increase; it’s an external factor.”
To mitigate the impact of PMS pricing in Nigeria, PETROAN advocates for privatizing government-owned refineries and encouraging competition in the downstream sector.
Furthermore, PETROAN believes that the privatization of refineries will not only reduce the financial burden on the government but also increase efficiency and productivity in the sector. This, in turn, will lead to a more stable and competitive market, ultimately benefiting the Nigerian consumer.
In addition, PETROAN is calling on the government to provide a more conducive business environment for retail outlet owners, including access to affordable financing and infrastructure development. By doing so, the government can help reduce the costs associated with running a retail outlet, thereby making petrol more affordable for Nigerians.
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