The chairman of the Major Oil Marketers Association of Nigeria (MOMAN), Adetunji Oyebanji, has expressed doubt over the possibility of a downward review of the pump price of petrol, following the decline in crude oil prices recently in the international market.
Oyebanji is of the opinion that price adjustment is a function of several factors of which crude pricing is just one of the various indices. He is of the view that the exchange rate is a major determining factor and that except the present price template is reviewed taking into account all the changing market variables, pump price may likely not change in either direction.
The Petroleum Products Pricing Regulatory Agency (PPPRA) had earlier hinted of a possible downward review of the pump price of petrol in the country following decline in crude oil prices in the international market.
Oyebanji while reacting on whether price adjustment of petrol is convincing and conceivable, said, available infrastructure may not support the idea, because beside high exchange rate, other associated costs like, bridging cost which is done by road takes toll on transportation of products.
The MOMAN chairman also said his association will not resume the importation of petroleum products into the country for now till the regulatory environment improves. He said marketers are currently operating at huge losses and many operators have shut down operations because the sector is highly regulated and not investment friendly.
He noted that since the association is operating under a regulated regime and that it can only follow guidelines issued by the industry regulator.
“We are currently tied to a margin which is fixed and we cannot adjust. If my input cost is going up and exchange rate is going up it affects our business, pump price has to do with exchange rate, so we have to understand the economics,” he said.