The National Petroleum Authority (NPA) has offered clarification on the temporary regulation of fuel prices under the Gold-for-Oil (G4O) policy.
The Communications Manager of the NPA, Mohammed Abdul-Kudus, explained in an interview on the Citi Breakfast Show that the regulation is aimed at ensuring that the prices of petroleum products imported under the G4O program are reflected at the pump for the benefit of 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,” Abdul-Kudus said. He added that the non-clarity in pricing and difficulty in arriving at the price, due to the insignificance of the current quantity of product, has warranted the NPA's temporary 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,” Abdul-Kudus stated.
The NPA also announced its plan to work with the Bulk Oil Storage and Transportation (BOST) Company to negotiate prices with international oil traders to ensure a competitive landed cost for the products procured under the G4O program.
The NPA revealed that the first shipment of 40,000 tons of diesel, valued at $40 million, arrived in January under the G4O policy.
The clarification by the NPA comes after calls from industry experts, including the Institute of Energy Securities, for the government to provide details on spending for the initial consignment. The temporary regulation of fuel prices under the G4O policy is aimed at ensuring a transparent and fair pricing system for consumers.
