The group chief executive officer of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari has attributed the recent surge in petrol pump prices, which has risen from N540 to N617 per litre, to prevailing market forces.
Kyari, stated this in an interview with newsmen on Tuesday, July 18, 2023, shortly after a private meeting with the Vice President, Kashim Shettima, at the Presidential Villa in Abuja.
Kyari explained that the increase in the price of pms has nothing to do with supply issue, adding that there are robust supply of the product in the country.
”I don’t have the details this moment. You know we have the Marketing Wing of the company, they adjust prices depending on the market realities.
”And this is the meaning of making sure that the market regulate itself so that prices will go up and sometimes they will come down also and this is really what we are seeing in reality this is how the market works.
”There is no supply issue completely when you go to the market you buy the product you come to the market and sale it at prevailing market price there is nothing to do with supply we don’t have supply issues.”
”There are robust supply, we have over 32 days supply in the country, that’s not a problem. What I know is that the market forces will regulate the market, prices will go down sometimes and sometime it will go up but there will be stability of supply.
He assured Nigerians that the policy was the best way for the country going forward.
”And I am also assuring Nigerians that this is the best way to go forward so that we can adjust prices when market comes.
”I know that a number of companies have imported petroleum pms so many of them are online. Market forces have started to play, people have confidence in the market and private sector people are now importing product.
”And there is no way they can recover their cost if they cannot take market reflective cost,” Kyari said.
Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, also shed light on the recent increase in petrol prices, pointing to the rise in global crude oil prices as a significant factor.
Ahmed highlighted the impact of fluctuating freight costs and various miscellaneous expenses faced by importers during the distribution process, which collectively contribute to changes in prices.
He said, “Basically, what we’re seeing is the effect of market forces. You can see that crude oil prices have been on the rise. Just a week ago, crude oil prices hovered around $70 per barrel, but now it’s surpassed $80 per barrel. So naturally, these prices also influence the cost of the product.”
The Nigerian National Petroleum Company Limited (NNPCL) increased the pump price of petrol, known as Premium Motor Spirit (PMS), from N537 to N617 per litre this morning.
This is the second in less than two months.
In May, a day after President Bola Ahmed Tinubu was sworn into office, the NNPC increased the fuel price from N195 per litre to N537 per litre.
These increases follow the Tinubu-led federal government’s removal of fuel subsidy.
It was learnt that the increase has been observed at NNPC filling stations in Abuja, with other stations to join in soon.
In the first half of 2023, Nigeria spent N3.6 trillion on fuel subsidy alone. According to the Federal Government, the country will save close to N6.7 trillion if fuel subsidies payment is discontinued.
Nigeria has spent N13.7 trillion on fuel subsidy in the last 13 years, according to Nigeria Extractive Industries Transparency Initiative.
