THE Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC) Mele Kyari, has addressed concerns about the increasing prices of Premium Motor Spirit (PMS), otherwise known as petrol, across Nigeria.
Kyari assured Nigerians that with the final removal of subsidy, competition among major players in the oil sector would lead to a decrease in petrol prices, contrary to the recent upward trends causing panic in the country.
Kyari spoke on Arise TV’s Morning Show, on Thursday, June 1.
The NNPC had adjusted the pump price of petrol by about 200 per cent to reflect market realities immediately after President Bola Tinubu declared the final removal of subsidy.
On Wednesday, May 31, reported that following the removal of petroleum subsidy, fuel queues resurfaced at filling stations nationwide as many retailers shut their stations, hoarding their stock and creating scarcity with a view to hiking fares later.
In a template released on Wednesday, May 31 to marketers, the NNPC confirmed the astronomical rise in the pump price of the product, with the minimum being the N488 per litre obtainable in Lagos, while it will be selling as high as N557 per litre in Maiduguri.
Confirmed that the price in different states varies based on the vagaries of logistics, especially transportation costs.
Meanwhile, speaking on the issue during Arise TV’s Morning Show on Thursday, Kyari said the removal of subsidy would encourage new entrants into the market, fostering competition and phasing out monopoly.
He stressed that the development would lead to healthy competition and ultimately result in a downwards review of petrol prices nationwide.
“The beauty of this (subsidy removal) is that there will be new entrants (into the market) because oil marketing companies’ reluctance to come into the market all along is the very fact of the subsidy regime that is in place.
“And that subsidy regime doesn’t have a guarantee of repayment back to the those who provide the product at subsidise price and now that the market is being regulated, oil marketing companies can actually import product or even if it is produced locally, they can buy and take it into the market and sell it at its retail price.
“Therefore, you will see competition, even with NNPC. And by the way, by law, NNPC cannot do more than 30 per cent of the market going forward. As soon as the market stabilises, oil marketing companies are able to come in…
“Competition will definitely come in and the market will regulate the prices itself. Therefore, this is just an instantaneous price and within a week or two, you will continue to see different prices because of different approaches from major players, companies have different approaches to it and competition will guide that. Ultimately, you’d see changes downwards and it is very likely because efficiency will come in.
“As soon as competition comes in, people will become more efficient in their depots, in managing their trucks and in managing their fuel stations so that people can come to their stations. And it is showing already, right now, you will see motorists going to stations where they can have price differences, so this will regulate the market and on its own, the price will come down naturally and I don’t see any doubt about this,” Kyari said.
Speaking on the issue of fuel stations raising their pump prices despite having subsidised products in stock, Kyari described the development as “a typical stock management matter affecting all commodities”, not just petroleum.
He noted that if the market conditions were reversed, prices could have collapsed, and those holding old stock would have to sell at lower prices to align with market conditions.
Kyari added, “It could have been the other way round, prices could have collapsed downwards and those holding the old stock will have to sell at lower prices to arrive at market condition.
“It is not something serious or strange, this is a stock management issue and it is very typical, no one can do anything different about this.
“The prices we are seeing today at our station are the current price of the commodity. This means that prices in the market can go down at any time and of course, the market will adjust itself.”
FG, Labour meeting deadlocked
The ICIR reports that, in Abeokuta, Ibadan, Osogbo, Akure and Ado-Ekiti, petrol will be selling for N500 per litre. In Port-Harcourt, Calabar, Benin and Asaba, the product will be N511 per litre.
In Ilorin, Uyo, Umahia and Owerri, it is also N511 per litre, while it is N537 per litre in Abuja, Jos, Lafia, Minna and Makurdi. It gets higher in Kano, Kaduna, Dutse and Gusau at N540 per litre, and N545 per litre in Birnin Kebbi.
It is highest in Maiduguri and Damaturu at N557 per litre.
According to Dickson Aja, a commercial bus driver interviewed, he purchased fuel at a rate of N530 per litre in the Gwagwalada Area Council of the Federal Capital Territory.
On Wednesday, May 31, the Federal Government and organised labour met on the issue of fuel subsidy but the meeting ended in a deadlock as they failed to reach a consensus following the hike in petrol pump prices to over N700 from N195 per litre by oil marketers.
Organised labour was represented at the meeting by leaders of the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC), Joe Ajaero and Festus Osifo, respectively.
Kyari; a former NLC leader and former governor of Edo State, Adams Oshiomhole; Permanent Secretary, State House, Tijjani Umar; and Head of Service of the Federation, Folashade Yemi-Esan, represented the Federal Government.
After the meeting, Dele Alake, who spoke on behalf of the Federal Government, said negotiations between the two sides were ongoing.
The meeting will be reconvened on a yet-to-be-determined date.