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Nigeria’s Petrol Prices Soar Due to Market Forces, CEO Mele Kyari Explains

The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has shed light on the recent surge in petrol pump prices in Nigeria, attributing it to market forces. With prices escalating from N540 to N617 per litre, Kyari emphasized that the shift reflects the dynamics of a market-regulated pricing model.Following a closed-door meeting with Vice President Kashim Shettima at the State House, Abuja, Kyari addressed journalists, clarifying that the price fluctuations were a natural consequence of 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,” he stated.However, Kyari categorically refuted any suggestion that the price hike was a result of a petrol supply shortfall. “No, there is no supply issue. It is not a supply issue,” he asserted, emphasizing that the country had a robust supply chain and ample reserves. “We’ve had over 32 days of supply in the country. That’s not a problem,” he added.The CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, echoed Kyari’s sentiment, attributing the price surge to the global increase in crude oil prices. He also pointed out that changes in freight costs and other miscellaneous expenses incurred during distribution contributed to the fluctuations.”Basically, what we’re seeing is the effect of market forces. You can see that crude oil prices have been on the rise. Just a week ago, crude oil prices hovered around $70 per barrel, but now it’s surpassed $80 per barrel. So naturally, these prices also influence the cost of the product,” Ahmed explained.The price changes were confirmed by independent oil marketers, who noted that fluctuations by NNPCL typically indicated a rise in petrol pump prices, given that NNPCL remained the primary petrol importer in Nigeria. However, they acknowledged that other marketers were gradually entering the market as well.”This is because NNPCL is still the major importer of petrol into Nigeria currently, though other marketers are gradually importing the commodity. The price this (Tuesday) morning at some NNPCL stations is N617/litre,” said Mohammed Shuaibu, Secretary of the Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja, in a statement to The PUNCH.The recent spike in petrol prices came after President Bola Tinubu’s announcement on May 29, discontinuing the petrol subsidy, which led to a substantial jump in the commodity’s price from N198/litre to over N500/litre on May 30, 2023. As market dynamics continue to exert their influence, stakeholders in Nigeria’s petroleum sector closely monitor the situation.


Ademola Adeyemi

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