The Central Bank of Nigeria CBN, says it has little or no control over the price of either Premium Motor Spirit (PMS) or the dollar.
A Principal Manager with the apex bank, Mr Osagie Clement, disclosed this when he appeared before the House of Representatives ad-hoc committee investigating the recent hike in the price of fuel.
Mr Clement stated that the demand for PMS has gone down by 30 percent due to the hike in the price.
He said on a monthly basis, 150 million dollars is deployed to PMS importation from CBN intervention and urged the federal government to discourage importation and encourage local production, which he said would reduce the current challenges in the nation’s economy.
He however expressed optimism that there are positive times ahead in the next four months for forex to benefit the nation’s economy.
“The PMS market, perhaps it is envisaged that there is no more subsidy, no more bottlenecks so it becomes a real market enterprise so more people will come into that business and you see competition will bring the price down.
The Executive Director of distribution systems of the Nigeria Midstream and Downstream Petroleum Regulatory Agency (NMDPRA), Mr. Ogbugo Ukoha, also speaking at the meeting, stated that the market forces of demand and supply determine what the prices of products would be.
According to him, the Petroleum Industry Act (PIA), has however given regulators the authority to intervene to avoid cartel building, which is why the agency introduced competition to also deal with illegal profiteering.
“PIA has given the authority quite enormous power to intervene to avoid cartel building which is why we have introduced competition and to also deal with illegal profiteering and more importantly to work with the Federal Consumers Protection Council in relation to consumer protection,” he added.
Speaking earlier at the meeting, the Chairman of the House of Representatives ad-hoc committee investigating the recent hike in the price of fuel Hon. Babajide Benson, noted that the Petroleum Industry Act PIA has however given regulators the authority to intervene to avoid cartel building but noted that the low demand for petrol due to its hike is worrisome.