…Rising crude price, freight cost responsible for hike – NMDPRA
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL) Mr Mele Kyari said Tuesday that the upward review of the pump price of fuel from N540 to N617 per litre was necessitated by market forces.
Fielding questions from State House correspondents after a meeting with Vice President Kashim Shettima at the Presidential Villa in Abuja, Kyari said the latest increase has nothing to do reported short supply of petrol.
“They are just prices depending on the market realities. This is the meaning of making sure that the market regulates itself. Prices will go up and sometimes they will come down also,”
“There is no supply issue. It is not a supply issue. When you go to the market, you buy the product, you come to the market and sell it at its prevailing market price. It has nothing to do with supply. We don’t have supply issues.
“We have a robust supply. We’ve had over 32 days of supply in the country. That’s not a problem,” he said.
Also speaking, the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) Mr Farouk Ahmed said the price increase stems from the rising price of crude oil.
He also cited changes in freight prices alongside other ancillary costs that the importers incur during distribution as some of the factors responsible for the hike.
“When you say market forces are working, basically what it is, is that you…you can see the price of crude going up.
“A week or so ago, the price of crude was hovering around $70 per barrel. Now, it’s over $80 per barrel. So, of course, the crude prices also drive the product price.
“As the importers are importing, they basing it on the cost of importation plus the freight plus other costs elements in terms of local distribution,” he said.
The independent oil marketers had on Tuesday announced a new fuel price as a result of N77 adjustment by NNPCL stations.
