Mele Kyari

NNPC Releases New Guidelines Regarding Increase in Petrol Prices

The Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari, addressed concerns on Thursday regarding the rising prices of Premium Motor Spirit (petrol) and sought to alleviate panic among Nigerians.

Kyari expressed his belief that the entry of new competitors in the oil sector would inevitably lead to a drop in petrol prices, countering the recent upward trend that has caused anxiety across Nigeria.

Mele Kyari

Earlier reports from Naija News attributed the influx of Nigerians at fuel stations to the rumored removal of petrol subsidies. On Wednesday, the NNPC announced an adjustment in the petrol pump price to reflect current market conditions, although specific new prices were not provided.

As a result, many retail outlets in Lagos, Abuja, Ogun, and other states have been selling petrol for prices ranging from N600 to N800.

Meanwhile, negotiations between the Federal Government and organized labor regarding the subsidy removal came to a halt on Wednesday, as they failed to reach an agreement in light of the significant increase in petrol pump prices from N195 to over N700 per litre by oil marketers.

During an interview on Arise TV’s Morning Show, Kyari reiterated that the removal of subsidies would attract new players to the market, fostering competition and putting an end to monopolistic practices while arguing that the change would ultimately lead to a reduction in petrol prices across the country.

Kyari explained, “The beauty of this subsidy removal is that it will encourage new entrants into the market because the reluctance of oil marketing companies to participate thus far has been due to the existing subsidy regime.”

With the market now deregulated, Kyari anticipated increased competition, including from the NNPC itself, which is legally limited to controlling a maximum of 30% of the market.

Competition will definitely come in and the market will regulate the prices itself… 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.”

Responding to the question regarding the fuel stations increasing their pump prices despite having subsidized products in stock, Kyari said, “This is the reality of the market. It applies to every commodity and not just petroleum. This means that prices in the market can go down at any time and of course, the market will adjust itself.”