Deregulation: NNPC, Independent Importers Must Adopt Same Forex Window-FG Committee

Following the continued rise in the price of petrol caused by the Federal Government’s deregulation of the Nigeria oil and gas sector, the Technical Committee on PMS Pricing has called on the need for all importers including Nigeria National Petroleum Corporation to adopt the same forex window used by Petroleum Product Pricing Regulatory Agency, to ensure alignment and accurate pricing.

The Technical Committee on PMS Pricing as set up by the government in December 2020, was charged with responsibility of appraising the market forces and other factors that would ensure price stability in the Nigeria oil market.

The Chairman of the Committee, Onochie Anyaoku explained that the committee developed a transparent methodology and a template that will serve as the guide on realistic PMS pump price and benchmark all pricing elements of the PMS pricing template with neighboring countries.

Anyaoku, who presented the committee’s report at the bipartite meeting between the FG and the organized labour in Abuja, said that the committee made some recommendations following an extensive review of the pricing framework in line with the terms of reference of the committee.

For the PPPRA, the committee recommended frequent monitoring of data of Rotterdam supply chain values, to form the basis of price determination until the West African basket is liquid and transparent enough to warrant its adoption in the pricing template.

It also said that PPPRA should convene periodic meetings with PPMC and other importers to ensure actual cost of supply reflective determination as an interim solution.
He said, “Based on extensive review of the pricing framework and in line with the terms of reference of the committee, the following recommendations were proposed and adopted: PPPRA to convene periodic meetings with PPMC and other importers to ensure actual cost of supply reflective determination as an interim solution.

“All importers including NNPC to adopt the same forex window used by PPPRA to ensure alignment and accurate pricing. PPPRA board to adopt weighted average as the basis of determination.

“NLC, TUC, PENGASSON and NUPENG to witness the transparent determination at the periodic meeting.

“Government to enforce immediate collection of NPA and NIMASA charges in naira to reduce pressure on forex demand and pump price hike.”

He also said there is need to develop adequate communication strategy on the necessity of deregulation and the benefit to the people, to create public awareness and gain acceptability of deregulation.

This, he noted will reduce the pressure on labour to react to fuel increase.

“Deregulation is a huge change in national policy but highly desirable in this stage of our national development policy, for which its implementation requires trust building steps and commitment to visible frugal spending by government,” he added.

The Minister of Labour and Employment, Chris Ngige, said that the report of the Committee will be adopted, while that of the Electricity Tariff Committee was expected in a week’s time.

He explained that the organised labour requested for some time to subject the report on PMS pricing to their organs for further investigation.

He said, “It is a technical report, so they needed further investigation of the report by their own technical research team. The Technical Committee on electricity tariff has not finished. We expect the report in a week’s time. So, cogently, we are reconvening on 22nd of this month to take both reports.”

According to the Minister, the organised labour will reconvene on February 22 for the consideration of the reports of the bipartite technical committees on fuel price and electricity tariff.