The Major Oil Marketers Association of Nigeria (MOMAN) on Wednesday, said the international price of crude oil and the exchange rate constitute the largest components of the cost build-up for Premium Motor Spirit (PMS).

It said this accounted for over 80 percent of the cost adding that the remaining 20 percent includes statutory dues, distribution costs, and margins.

The Executive Secretary, MOMAN, Clement Isong who made the disclosure in a press statement said this is expected in a liberalised market, where the pump price of PMS accurately reflects the current economic realities.

Related Posts Register on NiDCOM portal for proper identification, Abike Dabiri urges Diasporans Sokoto Governorship Tribunal: Aliyu, APC lead 2 witnesses to close defence FG moves to attract investors through information technology-enabled services

He said although, there has been a significant increase in the foreign exchange rate,”we can infer from our calculations in May that the Nigerian National Petroleum Company Limited (NNPCL) determined its pump price using an exchange rate of about N630 to the US Dollar, while banks reported an exchange rate of approximately N650 on the Investors and Exporters (I&E) window. “

Currently, he said the liquid exchange rate is close to N825 to the Dollar stressing that the devaluation adds N100 to the cost of importing a single litre of PMS into the country.

He said with this, an increase in the pump prices of petrol should be expected.

However, MOMAN advocated the need for all stakeholders across the federal, state, and local governments, as well as employers of labour, to implement palliative measures to support less privileged individuals in society.

Also, the Association urged the government and businesses to promote the use of LPG and CNG as alternatives to auto fuel.

“In any event, the country will need to explore and deploy different energy options to develop a sustainable, affordable and long-term energy mix for powering homes, businesses and mobility,” it said.

The association further applauded the FG for its efforts in opening the market, allowing various players to import petroleum products into the country.

The market liberalisation and the commitment to a level playing field, it stated, should enhance operators’ efficiency, enabling them to offer competitive pricing choices to the public.

 

 

According to MOMAN, some operators have successfully imported PMS into the country, marking the first practical step towards a liberalised market.

 

But, the major challenges, it emphasised, still lie in accessing foreign exchange for imports and ensuring a level playing field regarding pump prices.

 

“If marketers are undertaking the financial risk of importing petrol, measures must be in place, in line with the Petroleum Industry Act, to ensure that no one player has an unfair advantage,” it noted.

 

The association further recommended an effective and sustainable implementation of the gains from subsidy removal. These gains, it noted, should be invested in the promised palliatives, including subsidised transportation, as well as social investment programs for healthcare, education, and infrastructure development (such as roads, railways, and power).

 

Others include focused and sustained increase in national production of crude oil from the current 1.2 million barrels per day to closer to 2m barrels per day. This is expected to generate the much-needed foreign exchange.

 

They also called for a transparent process in delivering the recommendations.

 

“We firmly believe that transparency & engagement are essential for building public trust and understanding.

 

“The reality is that downstream deregulation has brought about structural changes and opportunities for Nigeria and PMS now stands as the most expensive product in the energy mix for consumers.

 

“In conclusion, MOMAN would like to offer pragmatic advice to combat the current situation faced by all Nigerians and minimise the financial impact on households.Nigeria is blessed with one of the largest gas reserves in Africa and an abundance of solar resources so we encourage end-users to analyse and adjust their individual energy consumption mix,” it added.

Also Read:

African countries need better transport inter-connectivity, cooperation, integration— Speaker Abbas

 

 

Lift embargo on employment into MDAs, Reps urge Tinubu

 

Ease age requirements for job seekers in Nigeria, Senate urges employers

 

 

Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (Syndigate.info).