Petroleum marketers have rejected government-imposed N1,350 price caps on petrol, insisting that market forces, competition and improved distribution efficiency should determine prices in Nigeria’s deregulated downstream sector.

The Major Energies Marketers Association of Nigeria said arbitrary price caps would not address the underlying challenges in the petroleum market, advocating transparent pricing mechanisms and measures to tackle supply bottlenecks and reduce operating costs.

According to a summary of MEMAN’s third-quarter press engagement held virtually on Thursday in partnership with S&P Global Energy, the association maintained that “government arbitrary price caps are not the solution to petroleum market challenges”.

The position comes a week after the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, announced that the Federal Government was negotiating a N1,350-per-litre ceiling on petrol’s ex-gantry or landing cost, under which refiners and importers would initially absorb costs above the ceiling and recover the shortfall later when market conditions improved.

The Major Energies Marketers Association of Nigeria said arbitrary price caps would not address the underlying challenges in the petroleum market, advocating transparent pricing mechanisms and measures to tackle supply bottlenecks and reduce operating costs.

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