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July 18, 2023
The Nigerian National Petroleum Company Ltd., has attributed the increase in the price of Premium Motor Spirit (PMS) also known as petrol to the market realities.
The company’s Group Chief Executive Officer, Malam Mele Kyari, stated this in an interview with newsmen shortly after a private meeting with Vice President, Kashim Shettima, at the Presidential Villa, on Tuesday in Abuja.
Kyari explained that the increase in the price of PMS has nothing to do with supply issue, adding that there is robust supply of the product in the country.
“I don’t have the details at the moment. You know we have the Marketing Wing of the company, they adjust prices depending on market realities.
“And this is the meaning of making sure that the market regulate itself so that prices will go up and sometimes they will come down also, and this is really what we are seeing in reality which is how the market works.
“There is no supply issue completely. When you go to the market you buy the product you come to the market and sell it at prevailing market price. This has nothing to do with supply, as we don’t have supply issues.”
“There is robust supply, we have over 32 days supply in the country, that’s not a problem. What I know is that the market forces will regulate the market, prices will go down sometimes and sometimes it will go up but there will be stability of supply.
He assured Nigerians that the policy was the best way for the country going forward.
“And I am also assuring Nigerians that this is the best way to go forward so that we can adjust prices.
“I know that a number of companies have imported PMS so many of them are online. Market forces have started to play, people have confidence in the market and private sector people are now importing product.
“And there is no way they can recover their cost if they cannot take market reflective cost,” Kyari said.
On his part, Alhaji, Farouk Ahmed, Chief Executive Officer, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), said the authority doesn’t set price of the product but it was market determined.
“As a regulator you know I told you back in May that we are not going to be setting price, the market will determine that 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.
“This market is deregulated, it is open to all participants. As I mentioned also yesterday (Monday) when I was in Lagos we had about 56 marketing companies that have applied for and obtained license to import.
“Prudent Energy, AYM Shafa and Emadeb Cargo will be arriving on Wednesday the 19th, so this is like just an encouragement to see that the market is liberated and everyone is free to import so long as you are working within the framework especially in terms of quality.”
He insisted that the authority as a regulator would not put price cap because it was not part of those importing the product.
“As a regulator we are not going to put any price cap 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, basically what it means is that you can see the price of the Crude Oil going up, couple of weeks ago recovering around 70 dollars per barrel and now it is around 80 dollars per barrel.
“So of cause the crude price also drive the product price you know because the imposters are importing they are based on the cost of importation plus other cost element in terms of local distribution.” (NAN)
