Mele Kyari, the group chief executive officer of the Nigerian National Petroleum Company Limited, (NNPCL) said that market forces are to blame for the increase in gas prices in Nigeria.
This follows a recent price hike from N540 to N617 per litre, which, according to him, shows the dynamics of a market-controlled pricing strategy.
After a private meeting at the State House in Abuja with Vice President Kashim Shettima, Mele Kyari, spoke to the media and said, “They are just rates dependent on the market realities. Making sure the market governs itself has this connotation. Prices will fluctuate, sometimes rising and sometimes falling.
He refuted claims that a petrol shortage is to blame for the price increase.
“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 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,” he explained.
His comments came after several NNPCL-operated stations in Abuja increased the petrol pump price from N537/litre to N617/litre.
On his part, the CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, attributed the price hike to global crude oil prices increase.
He also mentioned that changes in freight costs and other miscellaneous expenses that importers encounter during distribution contribute to price changes.
Ahmed 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.”
Independent oil marketers confirmed Tuesday’s development. They noted that NNPCL’s price changes typically indicate a rise in the pump price of petrol, given that NNPCL remains Nigeria’s primary petrol importer.
“This is because NNPCL is still the major petrol importer into Nigeria, though other marketers are gradually importing the commodity.
The PUNCH reported the Secretary of the Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja, Mohammed Shuaibu, as saying “The price this (Tuesday) morning at some NNPCL stations is N617/litre.”
In his inaugural address on May 29, President Bola Tinubu announced the discontinuance of the petrol subsidy. This development led to a jump in the commodity’s price from N198/litre to over N500/litre on May 30, 2023.
