The Nigerian National Petroleum Company (NNPCL) Limited, yesterday reduced the retail price of the premium motor spirit (PMS) or petrol, across its retail outlets in the country.
In Lagos, petrol at the NNPCL retail outlets sold at N860 per litre, from a previous N945 per litre. The same commodity sold in Abuja at N880 per litre from a previous N965.
The latest price cut comes barely two weeks after the NNPCL reduced the pump price in Lagos to N945 per litre and five days after the Dangote Refinery implemented a reduction in the price of the same commodity across the MRS stations and its affiliate filling stations.
The latest price reduction means both NNPCL retail stations and MRS now sell at the same price per liter in Lagos.
This development, according to the Chief Executive Officer, Center for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, represents one of the major gains inherent in deregulation. He nonetheless cautioned that the evolving competition must be between producers and not producers and importers for it to be a fair competition.
A petrol attendant in the NNPCL retail station in Ikoyi confirmed the price cut. “As at this morning, we were still selling at N945, but by mid-day, we got the signal to reduce to N860 per litre; so that’s the price we are selling now,” the attendant, who declined to disclose his name, said.
Confirming the development, a commercial driver Audu, said he bought petrol at the NNPCL station in Lekki at N860 per litre. “At about 2pm yesterday, the station in Lekki had displayed the new price; so I bought at the new price,” he confirmed.
Similarly, in Abuja, a motorist, Bunmi Solomon, in a chat with our correspondent, confirmed buying petrol at N880 per litre. “At about 4pm yesterday, I bought petrol at Lugbe for N880 per litre,” Solomon informed.
Stakeholders however see this development as a good one for the Nigerian public. Besides, they argued that it is one of the gains of deregulation which allows for market forces to determine pricing of commodities.
While they agreed that the price cut can be sustained, however, caution, they said, must be applied to ensure that it is a healthy competition.
Yusuf said: “The continued price cut can be sustained as far as the fundamentals of the market can sustain it. The cut we are experiencing is a function of foreign exchange, international crude oil price. If these two factors are stable, then the price reduction can be sustained.”
Yusuf, an economist, however warned that the competition laying out in the sector now has to be balanced. According to him, the competition should be between producers and not between a producer and an importer.
“The competition will be healthy if it is between producers and not between producer and importer. Definitely, this will be counterproductive in the end because it would have given an undue advantage to one of them. It will be like a textile manufacturer here in Nigeria competing against a textile importer from China. It won’t be a fair competition because the cost environment will not be the same; so there has to be a level playing field,” he said.
The CPPE boss however agreed that the development is a “good one for the Nigerian people.”
