The Nigeria National Petroleum Company Limited (NNPCL) Managing Director, Mr. Mele Kyari, is claiming that market forces determined Tuesday’s new N617 per litre price of Premium Motor Spirit (PMS, aka petrol), which caught Nigerians napping and elicited anger at filling stations and on social media.
Insults and curses rained freely on him, NNPCL, the President, government, the Nigeria Labour Congress, and just about anyone perceived to be associated with the increase; but by afternoon, the price review was a fair accompli.
The head of the regulatory agency, Alhaji, Farouk Ahmed, Chief Executive Officer, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has also thrown up his hands in surrender, telling journalists, his agency could not put a cap on prices.
The authority doesn’t set price of the product but it was market determining itself, he said.
Kyari told journalists in the seat of power as he left a meeting, ostensibly with President Bola Tinubu, ”I don’t have the details this moment. You know we have the Marketing Wing of the company, they adjust prices depending on the market realities.
”And this is the meaning of making sure that the market regulate itself so that prices will go up and sometimes they will come down also and this is really what we are seeing in reality this is how the market works.
”There is no supply issue completely when you go to the market you buy the product you come to the market and sale it at prevailing market price there is nothing to do with supply we don’t have supply issues.”
”There are robust supply, we have over 32 days supply in the country, that’s not a problem. What I know is that the market forces will regulate the market, prices will go down sometimes and sometime it will go up but there will be stability of supply.
”And I am also assuring Nigerians that this is the best way to go forward so that we can adjust prices when market comes.
”I know that a number of companies have imported petroleum pms so many of them are online. Market forces have started to play, people have confidence in the market and private sector people are now importing product.
”And there is no way they can recover their cost if they cannot take market reflective cost,” Kyari said.
Alhaji, Farouk Ahmed, said: ”As a regulator you know I told you back in May we are not going to be setting price the market will determine itself and as you saw back in early June when prices came out it was based on the cost of importation plus other logistics of distribution and of course the profit margin by the importer.
”This market is deregulated, is open to all participants. As a mentioned also yesterday (Monday) when I was in Lagos we have about 56 marketing companies that have applied for and obtained license to import.
”Out of those 10 of them have indicated to supply within the third quarter which is July, August and September. And out of those already we received some cargoes from some of these Marketers.
“Prudent Energy, AYM Shafa and Emadeb Cargo is arriving tomorrow (Wednesday), So this is like just an encouragement to see that the market is liberated and everyone is free to import so long you are working within the framework especially in tems of quality.”
”But the pricing as a regulator we are not going to put the cap on the price because we are not part of those importing, we are not a marketing company, we are just a regulator.
”So when you say market forces are working basically what it means is that you can see the price of the Crude Oil going up, couple of week ago recovering around 70 dollars per barrel now is around 80 dollars per barrel
”So of course the crude price also drive the product price you know because the imposters are importing they are basen it on the course of importation plus other cost element in terms of local distribution.”