The National Petroleum Authority (NPA), has clarified that the decision to regulate fuel prices under the gold for oil policy is only short-term and will be halted when large volumes of consignment arrive in the country.
The Communications Manager of the NPA, Mohammed Abdul-Kudus, in an interview on the Citi Breakfast show on Monday explained that the decision is to ensure that the prices of petroleum products imported under the Gold-for-Oil (G4O) programme reflect at the pumps to benefit consumers.
“Currently they are commingling, what it means is that they are taking from the G4O and what they take from the prevailing market price, so the pricing dynamic is different. So when the volume increases when we have OMCs taking mainly from G40 then we don’t need to put our eyes on it because then the pricing is clear.
“It is because of the non-clarity and difficulty in arriving at the price because of the insignificance of the quantity that has warranted our monitoring. We hope that when the product supply increases over time and hopefully takes off the current arrangement over time and we are able to tell that this OMC is not selling any product apart from G4O then pricing is easier and we are not going to have any difficulty in monitoring,” Mr Abdul-Kudus told host Bernard Avle on Monday.
The NPA has also announced that it will work with the Bulk Oil Storage and Transportation (BOST) Company Limited to negotiate prices with international oil traders to ensure that the landed cost of products procured under the programme is always competitive.
The NPA also disclosed that the initial 40,000 tonnes of diesel that arrived in January under the Gold-for-oil policy were valued at US$40 million.
The clarification by the NPA comes after several calls by industry experts including the Institute of Energy Securities for the government to provide details on how much it spent on the initial consignment.
