The Nigerian National Petroleum Company (NNPC) Limited has come forward to clarify the factors contributing to the rise in petrol pump prices from N540 to N617 per litre.
Mele Kyari, the Group Chief Executive Officer of NNPC, attributed the increase to market forces.
Earlier reports by Talkglitz had highlighted the surge in petrol pump prices to N617 per litre in the Federal Capital Territory (FCT) and N568 per litre in Lagos.
Speaking with state house correspondents on Tuesday Kyari addressed the issue after a meeting with Vice President Kashim Shettima at the Aso Villa, where he explained that the price increase was not due to a shortage of petrol supply.
According to Kyari, the fluctuation in prices is a result of market realities and the need for self-regulation within the industry. He emphasized that prices can go up or down depending on prevailing market conditions.
He stated, “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.”
In response to concerns about a possible scarcity of petrol, Kyari dispelled the notion, stating, “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.”
Additionally, Farouk Ahmed, the Chief Executive Officer (CEO) of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), shed light on the price hike. Ahmed explained that the increase was primarily driven by the rising cost of crude oil and changes in freight rates, along with other expenses incurred by importers during the distribution process.
He further elaborated, “So when you say market forces are working, basically what it is, is that 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 base it on the cost of importation plus the freight plus other cost elements in terms of local distribution.”
The explanations provided by both Mele Kyari and Farouk Ahmed highlight the influence of market dynamics and international factors, such as crude oil prices and freight rates, on the cost of petrol. It is essential for consumers and stakeholders to understand these factors in order to navigate the current petrol pricing situation in Nigeria.
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