The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, has blamed market forces for the increase in petrol pump price from N540 to N617 per litre.
Speaking with Correspondents on Tuesday after a meeting with Vice President Kashim Shettima at the Presidential Villa Abuja, The NNPCL Chief explained that the increase is not based on the short supply of petrol.
“They adjust prices depending on market realities. This is the meaning of the market regulating itself.
Prices will go up and sometimes they will come down also,”
“No, 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 the 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,” he explained.
Kyari’s response is coming hours after some stations operated by the NNPCL increased the pump price of Premium Motor Spirit, popularly called petrol, from N537/litre to N617/litre in Abuja.
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On his part, the Chief Executive Officer, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, said the price increase stems from rising crude prices.
He also cited changes in freight prices alongside other ancillary costs that 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 and 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 indicates 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.
(Editor : Ena Agbanoma)
