Market forces responsible for rising petrol prices – Kyari

The NNPCL boss said the increase in the pump price per litre of petrol from over N500 to N617 is not a supply issue but market realities in action.

The GCEO of NNPCL, Mele Kyari addresses State House correspondents on Tuesday, July 18, 2023 in Abuja

The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, says market forces are responsible for the rising pump prices of Premium Motor Spirit known as petrol.

Kyari spoke on Tuesday afternoon after a meeting with Vice President Kashim Shettima at Aso Rock, Abuja.

He said with deregulation of the oil sector, market realities will force the prices of petrol up sometimes and at other times force the prices down.

The NNPCL boss said the increase in the price per litre of petrol from over N500 to N617 is not a supply issue, assuring Nigerians that the country has “robust supply” of the vital commodity.

Kyari said Nigeria has over 32 days of supply and not short of petrol.

He said the marketing team of the NNPCL is responsible for price adjustment and that the team “adjust prices depending on market realities”.

He said, “This is really what is happening; this is making sure that the market regulates itself so that the prices will go up and sometimes, it will come down also.”

Kyari assured Nigerians that the country is not in short supply of the essential commodity, adding that the rising price of petrol has nothing to do with supply difficulties.

“There is no supply issue; when you go to the market, you buy the product. You come to the market and sell it at the prevailing market prices, nothing to do with supply issues.

“We have robust supply; we have over 32 days of supply within the country,” he said.

On his message to Nigerians lamenting the skyrocketing prices of petrol, the NNPCL boss said allowing market realities to determine the prices of petrol is the way to go.

“What I know is that the market forces will regulate the market; prices will go down sometimes, sometimes it will go up, but there will be stability of supply. I am also assuring Nigerians that this is the best way to go forward so that we can adjust prices,” he said.

Also, the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, who addressed reporters after Kyari, corroborated the NNPCL boss’ position on market forces.

There seemed to be no respite for Nigerians after President Bola Tinubu announced the removal of petrol subsidy in his inaugural speech on May 29, 2023.

With the announcement, the pump price of a litre of petrol rose from N184 to N500. About two months later, the price jumped from N500 to over N617 on Tuesday, July 18, 2023, eliciting anger and criticisms from economically stranded citizens.

Fuel queues have immediately resurfaced in Lagos, Abuja, Port Harcourt and other cities across the country, with vehicle owners engaging in panic buying at the new rate of over N617 per litre, fearing that the price might go up again.

The unprecedented fuel prices come amid the unification of the foreign exchange rates by the Tinubu administration as well as rising inflation rates which the National Bureau of Statistics said hit 22.79% in June from the 22.41% recorded in May 2023.

The report also showed that food inflation spiked to 25.25% on a year-on-year basis which is higher than the 20.60% recorded in June 2022.

Meanwhile, the NMDPRA has said that oil marketers have commenced the importation of petrol.

The Tinubu government also said it planned to disburse N500 billion as palliative to cushion the effect of the skyrocketing fuel prices and food inflation. The government planned to give N8,000 to 12 million households within six months, a move that has been rejected by the Organised Labour and rights activists.