Why petrol sells at N617 per liter-
The sudden increase in the pump price of Petrol in Nigeria from N550 to N617 has been explained by the Group Chief Executive Officer (GCEO) of the NNPCL, Mr Mele Kyari.
According to Kyari, the sudden increase is as a result of prevailing market forces which will continue to drive the prices of Petrol in the country.
Kyari, who also argued that the increase was not caused by a short supply of petrol, assured that prices would fluctuate from time to time depending on activities at the international market.
He spoke with reporters after a meeting with Vice President Kashim Shettima at Aso Villa in Abuja.
He said: “I don’t have the details at this moment. The marketing wing of our company adjusts prices depending on the market realities. This is really what is happening; this is the meaning of making sure that the market regulates itself so that prices will go up and sometimes they will come down also. This is what we have seen and in reality, this is how the market works.
“There is no supply issue completely. There is a robust supply. When you go to the market, you buy the product; you come to the market you sell it at the prevailing market prices. We have over 32 days of supply in the country.
“What I know is that the market forces will regulate the market. I’m also assuring Nigerians that this is the best way to go forward.
“I know that a number of companies have imported petroleum products today. There is no way they can recover their cost if they cannot take market reflective cost.”
Chief Executive Officer of NMDPRA Farouk Ahmed said the price increase was due to rising crude prices.
He said: “This market is deregulated. We have about 56 marketing companies that applied and obtained licences to import. Out of those, 10 of them have indicated to supply within the third quarter, which is July, August and September.
“Already, we received some cargoes from these marketers: Prudent Energy, AYM Shafa and Emadeb. Emadeb Cargo is arriving tomorrow (today). So, this is 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.
“But as a regulator, we are not going to put a cap on prices because we are not part of those importing. We are not a marketing company.
“When we say market forces are working, basically, what it means is that you buy and you consider the price of crude going up.
A couple of weeks ago, the price of crude was hovering around $70/barrel. Now it’s hovering around $80/barrel.
“So, the crude price also drives the product price. Importers base their cost of crude, freight and other cost elements.”
IPMAN National Vice President, Alhaji Abubakar Maigandi, said that exchange rate contributed to the latest hike.
“The dollar rate has changed and since there is no more subsidy, it has also affected the cost of crude oil and eventually the landing cost of petrol,” Maigandi told The Nation in Abuja.
IPMAN Secretary, Suleja /Abuja Branch, Shaibu Mohammed, who also spoke with The Nation said that the ex-depot price has risen from N504 per litre on Monday to N560 in all the depots as of yesterday.
But Mohammed expressed displeasure with the sudden price change. He described the NNPCL as the actual regulator in a deregulated oil sector.
The IPMAN secretary sought competition in the market, stressing that the NNPCL singlehandedly raised the pump price.
He said, “The pump price has been jacked up to N617/litre(in Abuja). It is abnormal. The sector has been deregulated and liberalisation is on.
“Let competition come in. As it is, NNPCL is still the sole importer. it is regulating the market.”
Across the states and the FCT, some filling stations that got a hint of the increment shut their gates to motorists and other users of petrol on the grounds that they had run out of stock.
But some sold at the old prices in the early hours of yesterday before adjusting their pumps to reflect the new costs. Such stations witnessed vehicular queues.
The customers lamented that the hike came at a time when they were trying to adjust to the hardship caused by the old price announced by the NNPCL barely 48 days ago.
The NLC rejected the new pump price, saying it was anti-people.
This action will further increase the margin between the poor and the rich as it is clear that the government is taking away all the benefits meant for the poor and giving given to the rich.
Government is provoking Nigeria and attacking workers, students and others, NLC president, Mr Joe Ajaero, said while being featured on a national television programme.
He said: “I think Nigerians are being deceived. In the first instance, going by the claim that the independent marketers are now importing the petrol. Nigerians would want to know how many are involved in this.
“Nigerians also want to know the role of the NNPCL in the current dispensation. NNPCL cannot import and claim the fuel is imported by independent marketers.
“Two, the government withdrew subsidy from PMS and while we were discussing the aftermath of the withdrawal, another price increase.
“Now, why would the government go to court to seek a court injunction? Why will the government take other measures if it is not its business?
“It is like Nigerians have entered a rein when Nigerians are being punished unnecessarily and where lies are the order of the day.”
Ajaero said that the congress would “meet to take a decision on how best to address the latest development.”