BY EDMOND ODOK – The Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, on Tuesday declared that market forces are responsible for the current hike in the pump price of Premium Motor Spirit (PMS), popularly called petrol, from N540 to N617 per litre.
“Market forces have started to play; people have started having confidence in the market. Private sector people are importing products, but there is no way they can recover their cost if they cannot take market reflective cost”, he said.
According to him; “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. There is no supply issue. It is not a supply issue.”
This is as independent oil marketers earlier on Tuesday confirmed the fuel price hike, maintaining that upward shift by NNPCL stations in their prices ultimately indicate an increase in the commodity’s pump price.
Addressing State House correspondents on Tuesday after meeting with the Vice President, Senator Kashim Shettima in the Presidential Villa, Abuja, Kyari said; “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.”
Further defending developments within the sector, Kyari said it was in the nation’s interest for marketers to fix prices, adding; “I’m also assuring Nigerians that this is the best way to go forward so that we can adjust prices when market forces come to play.
“I don’t have the details this moment, but I know that our marketing wing acts just like every other company in this business. I know that a number of companies have imported petroleum products today. So, many of them are on line. I’m sure my colleague would confirm this.”
Kyari’s reaction is coming on heels of most filling stations operated by the NNPCL increasing the pump price of petrol in Abuja to N617 from the initial N537 per litre
Also commenting on the development, Chief Executive Officer, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, blamed the rising crude prices for the current price hike in petrol pump price.
Citing changes in freight prices, including other ancillary costs incurred by importers during distribution, Ahmed said; “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 are basing it on the cost of importation plus the freight plus other costs elements in terms of local distribution.”
