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The Central Bank of Nigeria (CBN) made a statement on Wednesday (August 2, 2023), clarifying that it does not have control over the prices of petrol and the performance of the dollar in the country.
Clement Osagie, a Principal Manager at the CBN, conveyed this information during his appearance before the House of Representatives Ad-hoc Committee investigating the recent fuel price hike resulting from the federal government’s removal of subsidy on the product in Abuja.
Osagie pointed out that the demand for fuel has decreased by 30 percent due to the price increase caused by the subsidy removal. He also revealed that the CBN used to pay $150 million monthly for fuel importation as part of its intervention.
“The federal government should discourage importation and encourage local production to alleviate the current challenges in the nation’s economy,” Osagie stated. He highlighted that without subsidies, the petrol market would become a real market enterprise, leading to increased competition and ultimately bringing the price down.
The Executive Director, Distribution Systems of the Nigeria Midstream and Downstream Petroleum Regulatory Agency (NMDPRA), Ogbugo Ukoha, supported the view that market forces determine the price of fuel. However, he emphasized that the Petroleum Industry Act (PIA) has given regulators the authority to intervene and prevent the formation of cartels. The NMDPRA introduced competition to address this concern.
“PIA has empowered us with considerable authority to intervene and prevent cartel building. This is why we have introduced competition and are actively tackling illegal profiteering. Additionally, we are collaborating with the Federal Consumers Protection Council to ensure consumer protection,” Ukoha explained.
In response to the ongoing fuel price increase and its impact on Nigerians, Hon. Babajide Benson, Chairman of the Ad-hoc Committee, expressed concern and emphasized their commitment to alleviating the hardships faced by citizens.
“We are not happy because Nigerians are still hurting, feeling the effect of the pump price increase. What can we do? Our job here is to ensure that the impact of the increase in price is drastically attended to, and that Nigerians don’t face untold hardship,” Hon. Benson stated.
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