Nigerian gov't assures citizens of fair oil prices

The Nigerian government has assured its citizens of adequate pricing of petroleum products even though international rates will continue to influence domestic pricing of the commodities, a senior government official said here Friday.

Olu Agbaje, assistant general manager of the Corporate Services of the Pipeline and Petroleum Products Regulatory Agency (PPPRA), told reporters that "the PPPRA wishes to assure Nigerians that it would not allow a situation whereby a cabal of petrol importers extort Nigerians."

The Nigerian government on Monday reduced the price of petrol from about 53 naira (about 40 US cents) per liter to 49 naira (about 37.5 cents) due to threats by the country's labor and civil society groups to embark on nationwide strike on Tuesday, if the government failed to revert to previous prices.

The official, however, called on Nigerians to shun incessant protest over petrol prices and to support the deregulation policy, which he described as the only guarantee for steady and adequate supply of the product.

That investors are reluctant to buy the nation's four refineries and 18 investors given licenses to build independent refineries have not done so shows that the Nigerian oil sector is perceived as unprofitable and uncertain, Agbaje said.

He said the government is compelled to bear the cost of the gap between the real market price and the pump price whenever it subsidizes the product, adding that no private investor can invest where the government fixes prices.

"If we do not encourage more players in the industry through deregulation," the official continued, "it will lead to shortfall in supply with the attendant consequences in product scarcity, black marketing of petroleum and adulteration of the commodity."

Source: Xinhua