Prof. Wumi Iledare, Professor Emeritus of Petroleum Economics, has said that executive fuel price fixing will undermine the very purpose of the Petroleum Industry Act, PIA.
Iledare’s comment came on the heels of Federal Government’s directive petroleum marketers to reflect the recent decline in international crude oil prices in the pump price of Premium Motor Spirit (PMS), commonly known as petrol.
Iledare maintained that a deregulated, rules-based downstream market cannot simultaneously operate under deregulation and executive price directives.
According to him, fuel prices increase quickly when crude rises, but fall slowly when crude falls — what economists call “asymmetrical price transmission.”
He added:“Crude up, prices take the elevator. Crude down, prices take the staircase. Immediate cuts are neither automatic nor economically inevitable.
He explained that under the PIA, government’s responsibility is not to set prices, but to ensure a contestable market, transparency, competition, and consumer protection through regulation, not politics.