The group chief executive officer of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, says market forces for the increase in petrol pump price from N540 to N617 per litre.
On Tuesday, petroleum product’s pump price gone up to N617 per litre in the federal capital territory (FCT) and N568 a litre in Lagos.
Speaking with state house correspondents on Tuesday after a meeting with Vice President Kashim Shettima at the Aso Villa, Kyari said the increase is not based on a shortfall in supply of petrol.
“There 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,” he said.
“No, there is no supply issue. It is not a supply issue.
“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 robust supply. We’ve had over 32 days of supply in the country. That’s not a problem.”
On his part, Farouk Ahmed, chief executive officer (CEO), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), said the price hike was as a result of rising crude prices.
He also attributed the increase to changes in freight rates as well as other ancillary expenses importers incur during distribution.
“So when you say market forces are working, basically what it is, is that you can see the price of crude going up,” he said.
“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 base it on the cost of importation plus the freight plus other costs elements in terms of local distribution.”
In his inaugural address on May 29, President Bola Tinubu pronounced that the petrol subsidy is gone.
Subsequently, NNPC increased the price of petrol at its retail outlets to N537 per litre in Abuja and N488 in Lagos.