The Federal Government is proposing the addition of the costs of managing the national strategic stocks of petroleum products to the retail price of the commodities.
This was revealed at the ongoing 14th Oil Trading and Logistics Conference marking Africa Downstream Week.
The proposal, which is included in the 2020 Petroleum Industry Bill, PIB, currently before the National Assembly, might lead to a hike in the pump price of Premium Motor Spirit, PMS, also known as petrol, as well as kerosene and diesel.
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This means that on the passage and signing into law of the PIB, the price of petrol might rise, as the cost of managing the national strategic fuel stocks would, from then, form an integral component of the pricing template of petroleum products pricing and would determine the pump price of the commodities.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority, which is the body that would emerge from the scrapping of the Petroleum Products Pricing Regulatory Agency, PPPRA, and the Petroleum Equalisation Fund, PEF, is to be saddled with the responsibility of setting up and managing the national strategic stocks of petroleum products.
The PIB is proposing that the Nigerian Midstream and Downstream Petroleum Regulatory Authority would determine the amount to be charged as levy, for financing the strategic petroleum products’ reserves, which would form part of the retail price of each of the petroleum products.
It is also mandating the Nigerian Midstream and Downstream Petroleum Regulatory Authority to work with security agencies, in deciding areas of the country, where the national strategic stocks would be maintained and distributed.
It would also be its duties to advise the government, government agencies and other stakeholders on commercial matters, relating to tariff and pricing frameworks; and develop open access rules, applicable to petroleum liquids and natural gas transportation pipelines, terminal facilities and bulk storage facilities.
(Editor: Ifeanyi Mark)
