Nigerian National Petroleum Company confirms hike in petroleum price above N500 per litre

The Nigerian National Petroleum Company Limited (NNPCL) on Tuesday confirmed rise in fuel price from N500 per litre attributing it to market forces, adding that there is no supply issue as there are enough petroleum products for onward distribution across the country.

Penpushing reports that Chief Executive Officer of the company, Mele Kyari, disclosed this sudden development to journalists after a closed-door meeting with Vice President Kashim Shettima at the State House in Abuja.

The Chief Executive Officer explained that with the deregulation of the oil sector, market realities will force the price of petrol up sometimes and at other times force it down, adding that the marketing wing of the company adjust prices depending on the market realities

“We have the marketing wing of our company. They adjust prices depending on the market realities. This is really what is happening; this is the meaning of making sure that the market regulates itself so that prices will go up and sometimes they will come down also. This is what we have seen, and in reality, this is what (how) the market works,” he said.

‘When you go to the market, you buy the product; you come to the market, you sell it at the prevailing market prices. Nothing to do with supply. We don’t have supply issues. There is a robust supply. We have over 32 days of supply in the country,” he said.

“Yes, 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, and 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’, he added.

“I don’t have the details at 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’, Kyari stated.

I’m sure my colleague would confirm this. 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 emphasised

Penpushing further reports that the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, in his own explanation attributed the rise in price to the global crude oil price increase.

‘As a regulator, I told you back in May that we are not going to be setting prices. The market will determine itself, and as you saw back in early June when prices came out, it was based on the cost of importation plus other logistics of distribution and, of course, the profit margin by the importer’, Ahmed said.

“This market is deregulated; it is open to all participants. As I mentioned yesterday, when I was in Lagos, we have about 56 marketing companies that applied and obtained licenses to import. Out of those, 10 of them have indicated to supply within the third quarter, which is July, August, September. Already, we received some cargoes from these markers: Prudent Energy, AYM Shafa and Emadeb. Emadeb Cargo is arriving tomorrow’, he stated

Penpushing also reports that the petroleum regulatory boss pointed out that the development ensures that the market is liberated and everyone is free to import as long as they work within the framework, especially in terms of quality.

“But to pricing, as a regulator, we are not going to put a cap on the price because we are not part of those importing. We are not a marketing company; we are just a regulator. So, when you say market forces are working, basically, what it is that you buy, you consider the price of crude going up. A couple of weeks ago, the price of crude was hovering around $70/barrel. Now it’s hovering around $80/barrel.

“So, the crude price also drives the product price. You know, because the importers are importing, they are basing it on the cost of importation plus the freight and other cost elements in terms of local distribution,” he said.

Penpushing reports that findings, however, revealed that at various petrol stations across the country, the pump price had been jacked up from the N500 per litre to AN617 per litre by the management of the stations.

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