Petroleum Products Pricing Regulatory Agency (PPPRA) says the continued regulation of fuel price is causing stagnation and poverty in the country.
Gatekeepers News reports that the Petroleum Products Pricing Regulatory Agency (PPPRA), says halting the regulation of the downstream oil sector can no longer be delayed.
PPPRA, in a document on deregulation, stated that petrol was barely sold at the approved rate in most states.
According to the agency, it had become vital to fully deregulate the cost of the pump price, adding that continued regulation was mainly benefiting the rich at the expense of the poor masses.
PPPRA said, “The regulation of the downstream sector is one of the reasons for the stagnation and impoverishment of the masses.
“Apart from Lagos, Abuja, and Port Harcourt, people rarely buy petroleum products at official prices. In some rural areas, you find out that most times these products are adulterated and bad for engines.
“Deregulation will change all that and even reduce the cost of transportation and food in the long run.”
The agency asserted that deregulation will facilitate private investment, expansion of the downstream sector, and also stimulate the resumption of products importation by oil marketing companies.
PPPRA while commenting on if deregulation meant that prices would rise or fall in response to market forces, said:
“In a deregulated market, prices should respond to market forces, where prices will be lower when there is a surplus in supply and higher when supply is limited.
“Moreso, competition among the players in the deregulated market will ensure that prices remain reasonable.”
According to the agency, Nigeria annually loses almost N1tn to subsidising petrol, a product used mainly for consumption rather than production, which has led to no real economic gain for the nation.
It added that in the wake of the global financial crisis and increasing sovereign debt risk, it has become critical for the government to look inside to finance its development needs and revitalise the economy.
The PPPRA stressed that petroleum subsidy removal and the subsequent deregulation of the petroleum downstream were among the measures needed to release funds for developmental work by dropping some resource-draining constraints.
