…Nigerians should brace up and face reality.
The Nigerian National Petroleum Company Limited (NNPCL) has provided an explanation for the sudden increase in the price of premium motor spirit (PMS), commonly known as petrol. The price of petrol at fuel stations in the Federal Capital Territory (FCT), Abuja, has surged from N540 to N617 per litre.
Mr Mele Kyari, the Group Chief Executive Officer (GCEO) of the NNPCL, addressed journalists at the Presidential Villa in Abuja, stating that the price surge is a result of market forces regulating themselves. He clarified that the increase is not due to a shortage of petrol supply, assuring the public that pricing will fluctuate based on international market activities.
Kyari emphasized the self-regulating nature of the market, explaining, “This is the meaning of making sure that the market regulates itself so that prices will go up and sometimes they will come down also. This is what we have seen, and in reality, this is how the market works.”
Regarding supply, Kyari assured that there is no complete supply issue, as there is robust supply with over 32 days’ worth of petrol available in the country. He reiterated that market forces will determine the prices, with occasional decreases and increases, while ensuring a stable supply. He mentioned that other companies in the industry, including private sector players, are importing petroleum products, and their confidence in the market contributes to its stability.
Farouk Ahmed, the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), also shed light on the situation. He attributed the price increase to rising crude prices, changes in freight prices, and other associated costs incurred during distribution by importers.
As a regulator, Ahmed clarified that the market is open and participants are free to determine prices within the framework, emphasizing that the authority does not set a price cap as they are not part of the importing companies. He highlighted that various marketing companies have obtained licenses to import petroleum products, and some have already started supplying. The market liberation encourages competition and ensures quality control, while the price is driven by the cost of crude oil, importation expenses, freight charges, and local distribution costs.
In conclusion, the recent surge in petrol prices is attributed to market forces regulating themselves in response to international factors, such as crude oil prices. The Nigerian National Petroleum Company and the regulatory authority emphasize the openness of the market and the role of competition in determining prices, while assuring the public of robust supply and stability in the petroleum sector.