By Henshaw NYONG, Uyo.
Fuel pricing in Nigeria is a highly sensitive issue that stirs deep emotions among citizens every time there’s an increase. The ripple effects of any price hike affect nearly every aspect of life, from the cost of transportation to the rising prices of goods and services. Nigerians are all too familiar with these struggles, and it is no surprise, the topic always provokes heated reactions whenever it comes up.
For many years, the Nigerian National Petroleum Company Limited (NNPCL) has borne the blame for these price hikes. Ask any Nigerian who is responsible for fuel prices, and they will immediately point to NNPCL. This perception stems from the fact that NNPCL has historically been the face of the petroleum sector. They manage refining, distribution, and oil and gas operations. So, naturally, when there’s a price change, it is NNPCL that makes the public announcement. Because of this, most people do not bother to question whether the company is actually the one determining the prices.
However, this belief is far from the truth. While NNPCL plays a visible role in the oil and gas industry, the reality of fuel pricing in Nigeria is much more complicated.
Enter NMDPRA
Unknown to many Nigerians, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is the agency truly responsible for setting and regulating fuel prices. Established under the Petroleum Industry Act (PIA) of 2021, NMDPRA oversees the midstream and downstream sectors, which include fuel pricing. It is tasked with developing pricing templates, setting tariffs, and ensuring fair competition in the downstream market.
Before the PIA was enacted, the responsibility for pricing was shared by multiple agencies, including the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Petroleum Equalization Fund (PEF), among others. These bodies have now been consolidated under NMDPRA, which holds full authority over pricing regulations.
Yet, despite this, many Nigerians remain unaware of the existence of the NMDPRA or its key role in pricing. Instead, they continue to hold NNPCL accountable for decisions beyond its control.
The Role of NMDPRA
The primary duty of the NMDPRA is to regulate both technical and commercial aspects of midstream and downstream operations, including fuel pricing. This involves monitoring global oil market trends, refining costs, and transportation expenses, before arriving at a final pricing structure. But Nigerians are rarely informed of this complex process, which explains why they continue to misattribute the responsibility for price changes to another body.
It is important to realize that NMDPRA is the actual organ of the Federal Government behind the pricing framework, while NNPCL merely acts as the middleman. NNPCL announces the final price to the public, but it is NMDPRA that decides it. This disconnect between who regulates prices and who communicates them is the root of the confusion that persists.
Time to Hold The Real Actors Accountable
Now that the public is aware of NMDPRA’s involvement, attention should be focused on the agency. The NMDPRA is mandated to protect consumers’ interests while ensuring profitability in the oil sector. However, with fuel prices continuing to rise, one has to ask if the agency is striking the right balance between these two obligations.
Nigerians deserve answers to key questions: What specific factors lead to price increases? How does NMDPRA arrive at these figures, and are consumers being protected in the process? Transparency is essential here. The NMDPRA must do more to explain how it calculates prices and assure Nigerians that their interests are safeguarded.
The Limited Role of NNPCL
While NNPCL is the largest oil marketer in the country, it has little control over fuel prices. It imports and distributes fuel based on the pricing structure that NMDPRA sets. Although NNPCL can influence market conditions, it doesn’t have the authority to independently set fuel prices.
Both NMDPRA and NNPCL must work together to communicate more clearly with the public. Nigerians deserve to understand how pricing decisions are made and who is truly responsible for these changes. NNPCL, in particular, can help clarify its role and educate the public on the process.
Moving Forward
It’s time for Nigerians to shift focus to the real actors in the fuel pricing structure. The NMDPRA, as the regulatory authority, must provide transparency and ensure that Nigerians are fully informed about how fuel prices are determined. The public should have access to detailed pricing breakdowns and be reassured that the process is fair.
Now that the veil has been lifted, it is clear that NMDPRA, not NNPCL, is the main force behind fuel pricing. Going forward, Nigerians should hold the right agency accountable, demand transparency, and ensure that fuel prices are set fairly and justly.
…To be continued!
