Understanding the Petroleum Pricing Mechanism In A Deregulated Economy

For more than five decades, Nigerians have lived through one petroleum pricing policy after another. Since 1973, successive governments have attempted to moderate or control the pricing mechanism for petroleum products. This gave birth to the Petroleum Equalisation Fund (PEF), established to ensure uniform fuel prices across the country. Today, under the Petroleum Industry Act (PIA), its responsibilities have been absorbed into the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Despite these interventions, the cost of fuel subsidies eventually climbed to the height of Mount Everest, consuming trillions of Naira and placing enormous pressure on government fina...