The Nigerian National Petroleum Corporation Ltd. (NNPC) has linked the surge in the price of Premium Motor Spirit (PMS), commonly known as petrol, to prevailing market conditions.
In an interview with journalists following a private meeting with Vice President Kashim Shettima at the Presidential Villa in Abuja, the Group Chief Executive Officer of the company, Malam Mele Kyari, clarified the reasons behind the PMS price increase.
Kyari emphasized that the price hike was unrelated to supply concerns and highlighted the ample product availability within the country.
“I don’t have the specifics right now. Our Marketing Wing is responsible for adjusting prices based on market conditions. This is how we ensure that the market self-regulates, allowing prices to fluctuate. This is the reality of how the market operates,” Kyari stated.
“There are no supply issues whatsoever. When you go to the market, you purchase the product and sell it at the prevailing market price. It has nothing to do with supply; we do not face supply issues. There is an abundant supply, with over 32 days’ worth of stock in the country. That is not a problem. The market forces will regulate the prices, causing them to decrease or increase, but the supply will remain stable,” he reassured.
Kyari expressed his confidence in this policy and stated it was the most suitable approach for the country’s future.
“I also want to assure Nigerians that this is the best way to move forward, allowing us to adjust prices according to market conditions. I know several companies have imported petroleum, many operating online. Market forces are at play, instilling confidence in the market. The private sector is now importing products, and they cannot recover their costs unless they set prices based on the market’s reality,” Kyari explained.
On the other hand, Alhaji Farouk Ahmed, the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), clarified that the authority does not determine the product’s price as the market sets it independently.
“As a regulator, as I mentioned in May, we will not set prices. The market determines itself. As you witnessed in early June when prices were announced, they were based on importation costs, logistics of distribution, and the importers’ profit margin,” stated Ahmed.
“The market is deregulated and open to all participants. As mentioned yesterday in Lagos, we have received license applications from approximately 56 marketing companies interested in importing,” he added.
Ahmed emphasized that the regulatory authority would not impose a price cap since it was not involved in importing the product.