Central Bank of Nigeria Asserts Limited Control Over Fuel Price Amid Investigation on Subsidy Removal

Central Bank Clarifies Lack of Control Over Fuel Price

A Principal Manager at the Central Bank of Nigeria (CBN), Clement Osagie, testified before the House of Representatives Ad-hoc Committee investigating the recent fuel price hike resulting from the government’s subsidy removal. Osagie emphasized that the CBN has no authority over the price of petrol or the performance of the dollar. He stated that fuel demand has decreased by 30% due to the price hike, leading to a monthly reduction of $150 million in CBN’s intervention for fuel importation.

Encouraging Local Production to Boost Economy

Osagie suggested that the federal government should focus on discouraging importation and promoting local production to address economic challenges. He argued that by eliminating subsidies and bottlenecks in the Petroleum Motor Spirit (PMS) market, it could become a more competitive enterprise, attracting more players and potentially reducing fuel prices.

Regulatory Authority to Avoid Cartel Building

The Executive Director, Distribution Systems of the Nigeria Midstream and Downstream Petroleum Regulatory Agency (NMDPRA), Ogbugo Ukoha, highlighted that market forces dictate fuel prices. He mentioned that the Petroleum Industry Act (PIA) has empowered regulators with significant authority to intervene and prevent cartel formation. NMDPRA has introduced competition in the market and aims to combat illegal profiteering, prioritizing consumer protection in collaboration with the Federal Consumers Protection Council.

Committee Vows to Address Fuel Price Impact on Nigerians

The Chairman of the Ad-hoc Committee, Hon. Babajide Benson, expressed concern over the hardship faced by Nigerians due to the pump price increase. He emphasized the committee’s commitment to finding solutions to mitigate the impact of the price hike and ensure that Nigerians do not endure undue hardship.