The Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has attributed the increase in petrol pump price from N540 to N617 per litre to market forces.
He spoke with State House reporters on Tuesday after a meeting with Vice President Kashim Shettima at the Presidential Villa Abuja.
Kyari said the increase was not based on a short supply of petrol.
“They are just prices depending on the market realities. This is the meaning of making sure that the market regulates itself. Prices will go up and sometimes they will come down also. There is no supply issue. It is not a supply issue.”
“When you go to the market, you buy the product, you come to the market and sell it at its prevailing market price. It has nothing to do with supply. We don’t have supply issues. We have a robust supply. We’ve had over 32 days of supply in the country. That’s not a problem,” the NNPCL GCEO explained.
Kyari added that it was in the interest of the country for marketers to fix the prices.
I’m also assuring Nigerians that this is the best way to go forward so that we can adjust prices when market forces come to play. I don’t have the details this moment, but I know that our marketing wing acts just like every other company in this business. I know that a number of companies have imported petroleum products today. So, many of them are on line. I’m sure my colleague would confirm this. Market forces have started to play; people have started having confidence in the market. Private sector people are importing products, but there is no way they can recover their cost if they cannot take market reflective cost.”
His reaction came after some stations operated by the NNPCL increased the pump price of Premium Motor Spirit, popularly known as petrol, from N537/litre to N617/litre in Abuja.
On his part, the Chief Executive Officer, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, said the price increase arose from rising crude prices.
He also cited changes in freight prices alongside other ancillary costs importers incur during distribution.
“So, when you say market forces are working, basically what it is, is that you…you can see the price of crude going up.
“A week or so ago, the price of crude was hovering around $70 per barrel. Now, it’s over $80 per barrel. So, of course, the crude prices also drive the product price. As the importers are importing, they are basing it on the cost of importation plus the freight plus other costs elements in terms of local distribution,” Ahmed explained.
Earlier on Tuesday, Independent oil marketers confirmed the increase in the cost of the commodity, as they stated that any price shift by NNPCL stations indicated a rise in the pump price of PMS.
In his inaugural address on May 29, President Bola Tinubu announced the discontinuance of subsidy on petrol.
This development led to the jump in the price of the commodity from N198/litre to over N500/litre on May 30, 2023.