In a statement following a meeting with Vice President Kashim Shettima at Aso Rock on Tuesday, July 18, 2023, Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, has clarified that the recent surge in pump prices of Premium Motor Spirit (PMS), commonly known as petrol, is primarily due to market forces.
Kyari emphasises that with the deregulation of the oil sector, the prices of petrol will be influenced by prevailing market realities, leading to fluctuations both upwards and downwards. He reassures Nigerians that there is an ample supply of petrol, dismissing claims that the price increase is linked to supply shortages.
"We have robust supply; we have over 32 days of supply within the country," Kyari states.
He points out that the NNPCL's marketing team is responsible for price adjustments, which are based on market dynamics. This, according to Kyari, ensures the self-regulation of the market, allowing prices to adjust in response to prevailing conditions.
"The market forces will regulate the market; prices will go down sometimes, sometimes it will go up, but there will be stability of supply," Kyari affirms.
In agreement with Kyari's stance, Farouk Ahmed, Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), echoes the role of market forces in determining petrol prices.
Queues resurface as petrol prices continue to surge
Lagos, Abuja, Port Harcourt, and other cities across Nigeria have witnessed a resurgence of fuel queues as the pump price of petrol soared from ₦184 to over ₦617 on Tuesday, July 18, 2023. The price surge has elicited criticism and discontent among economically strained citizens.
President Bola Tinubu's anouncemnet of the removal petrol subsidies earlier this year had initially caused the price to rise to ₦500 per liter. However, the recent increase to over ₦617 has left many vehicle owners in panic, fearing further price hikes.
The unprecedented fuel prices come amid the unification of foreign exchange rates by the Tinubu administration and soaring inflation rates. The National Bureau of Statistics reported a record 22.79% inflation rate in June, up from 22.41% in May 2023. Food inflation also spiked to 25.25% year-on-year, surpassing the 20.60% recorded in June 2022.
In response to public discontent, the government announced plans to disburse ₦500 billion as palliative to alleviate the impact of rising fuel prices and food inflation. The proposed initiative would offer ₦8,000 to 12 million households over a six-month period. However, this move has been met with rejection from Organised Labour and rights activists.