Mele Kyari, the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), has stated that the recent increase in petrol pump price from N540 to N617 per litre is a result of market forces.
Kyari made this statement after a meeting with Vice President Kashim Shettima at the Presidential Villa in Abuja, where he spoke with State House reporters.
According to him, the price increase is not due to a shortage of petrol supply. He emphasized that the fluctuation in prices is a natural outcome of market dynamics.
He said, “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.”
Kyari further explained that the country has a robust petrol supply, with over 32 days of supply available. He stressed that the decision to fix prices lies with the marketers.
“It is 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 into play,” He added.
The NNPCL CEO highlighted that private sector companies are actively involved in importing petroleum products and that market forces are starting to have an impact.
He noted that importers base their pricing on the cost of importation, freight charges, and other related distribution expenses.
Farouk Ahmed, the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, also commented on the price increase, attributing it to rising crude prices and changes in freight costs.
He emphasized that crude prices significantly influence product prices, and as importers factor in the cost of importation and other distribution-related expenses, adjustments in petrol prices occur.
“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.
On Tuesday morning, the Nigerian National Petroleum Company Limited (NNPCL) has once again raised the price of Petrol, also known as Premium Motor Spirit (PMS), from N537 to N617.
The increased price of petrol will be the second in few weeks. The first was in May, a day after President Tinubu’s inauguration, the nation witnessed an increase in fuel prices at the Apex Petrol station from N195 per litre to N537 per litre.
The decision followed President Tinubu’s inaugural speech, where he mentioned the removal of fuel subsidies.