PETROLEUM PRODUCTS PRICING: A CRITIQUE OF THE LEGAL FRAMEWORK AND THE FALLACY OF SUBSIDY IN THE OIL AND GAS SECTOR

The issue of petroleum product prices has been endemic in the country as a result of the all-pervasive importance of the products. Without these products the nation practically grinds to a halt. That is why any change in price results in a reaction from Nigerians that bothers on revolution. Car owners resort to the use of public transportation, public transportation owners raise the cost of transportation, majority of the citizens resort to cooking their food with fire woods, industrial establishments, having obtained the inputs at higher cost, transfer these increased costs to the final consumers the reaction is cyclical and endless. The relevance of these products is captured in the principal Act! that makes provision for petroleum activities in the country. The price control provision in the Petroleum Act, empowers the Minister of Petroleum Resources to fix the prices at which petroleum products or any particular class or classes thereof may be sold in Nigeria or in any particular part or parts thereof.2 This being the case, it is expected that the issue of the price of petroleum products be left, as dictated by the Act, to the Petroleum Minister, who in reaching a decision beneficial to Nigerians, not Nigeria in the first place, must have recourse to the information necessary as inputs and variables to price determiniation.3 The inescapable conclusion or inference from this statutory provisions is that while the price of export crude oil can be determined by international market forces, the prices of the products of petroleum, that is, Premium Motor Spirits(PMS), Dual Purpose Kerosine(DPK) Automotive Gas Oil (AGO) Low Profile Fuel Oil (LPFO) should be determined by the petroleum minister.