- Says new entrants will foster efficiency
- FG to roll out palliatives
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, has assured Nigerians that the present hike in petrol prices will crash very soon.
He tried to calm frayed nerves following the NNPCL’s new template, which fixed the price of petrol at between N488 and N557 per litre across the country.
Kyari, who spoke in an interview on Arise TV’s Morning Show programme monitored in Lagos, on Thursday, noted that competition among major players in the oil sector would force down fuel prices, noting that there was no need for Nigerians to panic.
According to him, the healthy competition that will be triggered will ultimately lead to a
downward review of the pump prices of petrol across the country.
Kyari said the beauty of the subsidy removal was that there would be new entrants in the market.
According to him, the reluctance of oil marketing companies to come into the market all along has been because of the subsidy regime that is in place.
He said, “That subsidy regime doesn’t have a guarantee of repayment 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 would 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. I don’t see any doubt about this.”
On the increase in pump price despite the fact that stations still had the product in stock at subsidised rates, Kyari 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 would 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 prices of the
commodity. This means that prices in the market can go down at any time and of course, the market
will adjust itself.”
FG to roll out palliatives
Meanwhile, the NNPCL boss has disclosed plans by President Bola Tinubu to roll out palliatives to cushion the effect of the removal of fuel subsidy on Nigerians.
He also revealed that one of the country’s four moribund refineries would be revived this year, while another one would be back on track by next year and another in 2025.
Kyari spoke after a meeting with the National Chairman of the All Progressives Congress, Abdullahi Adamu, at the party
secretariat in Abuja on Thursday.
He said, “There is a gradual process now of making a flexible and single foreign exchange regime. Everyone will be able to have access to foreign exchange and there is a transition going on now and NNPC cannot continue to be the sole importer. We know that this is going to vanish and the market will stabilise this.
“There is an ongoing process of rehabilitation and one of the refineries
will come on stream this year. The second will come on stream next year and the third will come in
2025.
“Of course, it is very obvious that we can no longer afford it. Subsidy bills have piled up. The country is not able to settle NNPC for the money we are spending on subsidy. Therefore, pricing petroleum product in the market is the right thing to do at this time. We believe this will benefit the country in the long run.
“I am aware that Mr President has directed some engagement and some palliatives will be put in place. And I am very
sure this will happen.”