Court Can't Impose Fuel Price, By Marketers
From Onyebuchi Ezigbo in Abuja
Petroleum products marketers have said they shunned the order of the Abuja Federal High Court directing them to reverse fuel prices to pre-February 9, 2004 rate, because that court cannot impose ceiling on petrol price.
The court had last month ordered the Federal Govern-ment and marketers to revert fuel price to N41.50 but petrol now sells at N43.90 per litre.
The ruling ensured that the Nigeria Labour Congress (NLC) suspended a nationwide strike and mass protest embarked upon to protest increases in fuel prices.
Chairman and Managing Director of Texaco Nigeria Plc, Mr. Jules Harvey, who made the marketer's position known to newsmen at the 35th Annual General Meeting of the company yesterday in Abuja, said the court case, which resulted in the ruling, was between the Federal Government, Nigerian National Petroleum Corpora-tion (NNPC) and the NLC and therefore, did not involve them.
"The court case is between the Federal Government, NLC and NNPC. It does not involve the marketers. It is not the court's place to impose ceilings on pump prices," he said.
Harvey said marketer's apparent disregard for the order could also be linked to the existing government policy of deregulation of the downstream sector which empowered private petroleum marketers to import products.
He said under the prevailing circumstance, the court cannot and should not impose price ceilings on markters. He added that reverting to the pre-fuel tax prices would result in losses for the marketers who are already finding it difficult to import refined products.
"Products prices in the local market does flow with movements of crude in the international oil market. This implies that the era of guaranteed margin is over as margins may either improve or deteriorate," he noted.
Also, top executives of some of the oil marketing companies spoken to shared similar opinions. They argued that under a deregulated downstream sector oil marketing companies are not price takers thus the court cannot force them to charge prices that do not reflect market realities.
The Position of the markters was made known following contempt proceedings brought by the NLC against the Federal Government for refusing to revert to pre-fuel tax levels of pump prices as ordered by the Abuja High Court.
The ruling also ordered the parties to maintain status quo ante until the original case instituted by the federal government against the NLC is concluded.
Marketers have since the court ruling, raised petrol price twice, first from N41.50 a litre to N42.90 and then N43.90 per litre two weeks ago, citing rising cost of importing the product.
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