Despite an extended crash of crude oil price, the Federal Government has declined to review the N123.5 to N125/litre pump price of petrol for the month of May 2020.
The Petroleum Products Pricing Regulatory Agency had stated that the cost of petrol would be reviewed monthly in accordance with the fluctuation of crude oil price in the international market.
“What we have in place is a market reflective pricing system. Petroleum products prices will be adjusted in line with market realities and the result is what we see presently with prices on the downward slide,” the PPPRA’s Executive Secretary, Abdulkadir Saidu, said recently.
Saidu added, “Accordingly, price will naturally be adjusted to reflect a true picture of market fundamentals at any particular period, high or low.”
Brent, the crude against which Nigeria’s oil is priced, tumbled in price repeatedly in April 2020, crashing below $20 per barrel on many occasions, before picking up marginally towards the end of April.
The commodity traded at $26.44 per barrel on Sunday, shedding $0.04 or 15 per cent as of10.05am Central Standard Time.
The crude oil market-based pricing regime in Nigeria came into effect on March 19, 2020, following the government’s approval for the adjustment of petrol price from N145 to N125/litre.
On March 31, 2020, the PPPRA met with oil marketers, the Nigerian National Petroleum Corporation, the Central Bank of Nigeria and other stakeholders, after which the cost of petrol was reduced to N123.5/litre.
Based on the agency’s words that price reviews would hold monthly, petrol users had anticipated another review on April 30, 2020. But this did not happen.
Saidu had stated that the PPPRA would continue to monitor price trends and advise monthly guiding price for all petroleum products, based on prevailing market realities and other pricing fundamentals.
He explained that the plunge in oil price occasioned by the outbreak of COVID-19 and slowing global oil demand had a direct bearing on the Expected Open Market Price of petrol, pushing it to a level below the previous pump price cap of N145/litre.
Senior officials of the agency stated on Sunday that the agency was studying the global oil market but had yet to put together a new price for the month.