The recent increase in the pump price of Premium Motor Spirit (PMS), otherwise known as petrol to N145 per litre by the Federal Government has led to a reduction of sales of the product by about 40 per cent.
The Chairman, Major Oil Marketers Association of Nigeria (MOMAN) and Group Chief Executive Officer of Forte Oil Plc, Mr. Akin Akinfemiwa revealed in a press statement at the weekend.
He revealed that there are indications that motorists have devised various means of using less petrol in view of the high cost, adding that his company’s customer surveys showed that motorists had resorted to various journey-planning initiatives to reduce fuel usage.
He identified some of the initiatives to include; “car-pooling, use of government mass transit buses and even cutting down on unnecessary movements and visits”.
“If you may agree with me, there has been a light flow of traffic in the Lagos metropolis in very recent times. We however deem this to be the initial reaction and thus believe that the demand will improve over time,” he explained.
Akinfemiwa insisted that marketers would continue to clamour for deregulation, saying that the recent price adjustment was not deregulation.
According to him, “The clamour is still on and the market is not deregulated as we speak. What we have is an adjustment of the foreign exchange line items on the modulated template to approximately N285 per naira from the Central Bank of Nigeria’s N197 rate previously used. However, we view this as a significant achievement and departure from the subsidy regime in which petroleum product imports accounted for over 50 per cent of Nigeria’s foreign exchange earnings leaving very little headroom for spending on social infrastructure”.
MOMAN boss said that the over-dependence on the CBN window at the time implied that marketers were stifled with respect to import volumes and hence various supply outages at the time. He said the industry would continue to work towards the full deregulation of the downstream sector and allow the customer benefit from the overall efficiencies.
“In addition, the new pricing structure would create a more structured approach for the operations of the downstream sector with a reduced dependent on NNPC by all marketers for petroleum products supplies as we now go and source ourselves. I am aware that some Major Marketers have been approached by some independent marketers for integration and absorption as some of these independent marketers may not have the scale required to operate in the days to come. This is the beauty of this new structure and it shall be to the ultimate benefit of the consumers,” he explained
Akinfenwa noted that the foreign exchange constraints are still there and recalled that when the price adjustment was made, there was an allusion to a secondary foreign exchange market. “But I am aware that the authorities are finalizing modalities for this and should be implemented in the coming days. There are sufficient petroleum products from both the NNPC and the Major Marketers pending the implementation of this policy,” he concluded.
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