NNPC Boss Kyari Issues Fresh Directive On Hike In Price Of Petrol
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mele Kyari, has tried to calm the fears of Nigerians on Thursday over the rising prices of Premium Motor Spirit, also known as petrol.
Kyari said that the removal of subsidy on petrol would attract new entrants into the oil sector, which would create competition and eventually lower the petrol prices, contrary to the recent trends that have caused panic across Nigeria.
Newsflash Nigeria had earlier reported that many Nigerians rushed to fuel stations due to the reported removal of subsidy.
On Wednesday, the NNPC announced an adjustment in the petrol pump price to reflect current market conditions, but it did not give specific new prices.
Many retail outlets in Lagos, Abuja, Ogun, and other states have since been selling petrol for between N600 and N800.
Negotiations between the Federal Government and organised Labour over the subsidy removal stalled on Wednesday, as they could not reach an agreement in light of the petrol pump price hike from N195 to over N700 per litre by oil marketers.
In an interview on Arise TV’s Morning Show, Kyari said that the subsidy removal would open up the market for new players, who would bring competition and end monopoly.
He argued that this change would lead to a price reduction in petrol across the nation.
Kyari explained: “The beauty of this (subsidy removal) is that there will be new entrants (into the market) because oil marketing companies’ reluctance to come into the market all along is the very fact of the subsidy regime that is in place.”
With the market now being deregulated, Kyari said he expects to see more competition, even with the NNPC, which legally cannot control more than 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.”
As to why fuel stations increased their pump prices when they still have already subsidised 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.”
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