Mele Kyari, the group chief executive officer of the Nigerian National Petroleum Company (NNPC) Limited, has faulted market forces for the increase in petrol pump price from N540 to N617 per litre.
Speaking with state house correspondents on Tuesday after a meeting with Vice President Kashim Shettima at the Aso Villa, Kyari said the increase is not based on a short supply of petrol.
Speaking with State House Correspondents on Tuesday after a meeting with Vice President Kashim Shettima at the Presidential Villa Abuja, he explained that the increase was not based on a short supply of petrol.
“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.
“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.
Kyari’s response was on the heels of the increase in pump price of Premium Motor Spirit, popularly called petrol, from N537/litre to N617/litre in NNPCL maga stations in Abuja.
The Chief Executive Officer, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, also said the price increase stemmed from rising crude prices.
He also cited changes in freight prices alongside other ancillary costs importers incurred during distribution as responsible for the hike.
“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 basing it on the cost of importation plus the freight plus 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 indicated a rise in the pump price of PMS.
In his inaugural address on May 29, President Bola Tinubu announced that fuel subsidy was gone.
This development led to the astronomical hikr in the price of the commodity from N198/litre to over N500/litre on May 30, 2023.