Group Chief Executive Officer of Nigerian National Petroleum Company Limited, NNPCL, Mele Kyari yesterday gave the assurance that Nigerians will soon experience lower petroleum price adding that the present hard situation is temporary.
The NNPC had came up with a new template which fixed the price of the product at between N488 and N557 per litre across the country.
He gave the assurance in an interview on Arise TV’s Morning Show programme monitored in
Lagos.
Kyari spoke on a day Amnesty International warned against the increased poverty removal of petrol subsidy would cause in
the country and asked the Federal Government to urgently come up with measures to mitigate the debilitating effects of the removal.
The NNPC boss said competition among major players in the oil sector will force down the price of the product, against the upward trends that had caused panic in the country. He said the removal of the subsidy will allow new This, he claimed, would ensure healthy competition which would ultimately lead to a
downward review of pump prices of petrol across the country. Kyari’s words: “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.
“That subsidy regime doesn’t have a guarantee of repayment back to those who
provide the product at a subsidised price and now that the market is being deregulated, oil marketing companies can actually import product or even if it is produced locally, they can buy and take it into the market and sell at its retail price.
‘’Therefore, you will see competition, even with NNPC. And by the way, by law, NNPC cannot do more than 30 per cent of the market going forward. As soon as the market stabilises, oil marketing companies are able to come in.
“Competition will definitely come in and the market will regulate the prices itself. Therefore, this is just an instantaneous price and within a week or two, 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 soon as competition comes in, people will become more efficient in their depots, in managing their trucks and in managing their fuel stations so that people can come to their stations.
‘’It is showing already. Right now, you will see motorists going to stations where they can have price differences, so this will regulate the market and on its own, the price will come down naturally anyone I don’t see any doubt about this.”
On why fuel stations hiked their pump price when they still had in stock already subsidised products, the NNPL boss said: “This is the reality of the market. It applies to every commodity and not just petroleum.
“It could have been the other way round, prices could have collapsed downwards and those
holding the old stock will have to sell at lower prices to arrive at market condition.
“It is not something serious or strange, this is a stock management issue
and it is very typical, no one can do anything different about this.
“The prices we are seeing today at our stations are the current price of the
commodity. This means that prices in the market can go down at any time and of course, the market
will adjust itself.”