NNPC says that if they provide financial assistance, the price of petrol will decrease.
Mele Kyari, the CEO of the Nigerian National Petroleum Company Limited, reassured Nigerians that the rising prices of petrol, also known as Premium Motor Spirit, will decrease due to competition among major oil industry players. This is in contrast to the current trend of increasing prices that has caused concern in the country.
According to The PUNCH, there have been long queues at fuel stations across the country due to the recent increase in petrol prices caused by the removal of petroleum subsidy.
On Wednesday, the NNPC announced that it had adjusted the petrol pump price to reflect market conditions. However, they did not disclose the new prices.
However, many stores sold the product for prices ranging from 600 to N800 in cities like Lagos, Abuja, Ogun, and other states.
In addition, discussions between the government and labor unions regarding the removal of fuel subsidy ended without an agreement. This happened because the petrol pump prices increased to over N700 from N195 per liter, causing disagreements between the government and oil marketers.
During an interview on Arise TV's Morning Show, Kyari expressed his views on the matter. He stated that removing the subsidy would allow new businesses to enter the market, which he believed would promote competition and eliminate monopolies. According to him, this competition would result in lower petroleum prices nationwide.
He further explained that the reason oil marketing companies were hesitant to enter the market was due to the existing subsidy system. Removing the subsidy would encourage new players to participate, leading to positive outcomes.
The current system of subsidies for products does not guarantee repayment to those who provide the products at a subsidized price. Now that the market is being regulated, oil marketing companies can import products or buy them locally and sell them at the regular price.
This means there will be competition, even with NNPC (Nigerian National Petroleum Corporation). According to the law, NNPC cannot control more than 30% of the market in the future. Once the market stabilizes, oil marketing companies will be able to enter.
With competition, prices will regulate themselves. It's just a temporary price, and within a week or two, you will see different prices because major companies have different approaches and competition will guide them. Ultimately, prices are likely to decrease because of increased efficiency.
When competition comes in, people will become more efficient in managing their depots, trucks, and fuel stations to attract customers. Currently, motorists are already going to stations with lower prices, which will regulate the market and naturally lower the price. There should be no doubt about this.
Regarding why fuel stations increased their prices even though they still have subsidized products in stock, the NNPL boss explained that it's a common practice in the market. It happens with all commodities, not just petroleum.
The prices we see at fuel stations now reflect the current price of the commodity. This means that prices in the market can go down at any time, and the market will adjust itself accordingly.
