The Federal Government and the Nigerian National Petroleum Company Limited (NNPCL) reiterated on Thursday that they will not intervene in setting the price of petrol, despite rising public concerns. This stance was made clear following a meeting convened by Vice President Kashim Shettima at the Aso Rock presidential villa to address the public outcry over the recent petrol price hike.
The meeting, attended by Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, NNPCL Group Managing Director Mele Kyari, and National Security Adviser Nuhu Ribadu, discussed the concerns surrounding the hike in the price of Premium Motor Spirit (PMS), commonly known as petrol.
No Price Fixing by Government
After the meeting, Lokpobiri confirmed that while the government would ensure product availability, it would not intervene in setting petrol prices, as the sector is deregulated. He assured Nigerians that NNPCL has sufficient petrol stock, and the current scarcity issues will be addressed in the coming days.
Lokpobiri emphasized that as more petrol becomes available across the country, prices will stabilize. He reiterated, “This sector is deregulated. The price will find its level based on market forces.”
Efforts to Stabilize Petrol Supply
Kalu Okuoha, Executive Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), highlighted ongoing efforts to stabilize petrol supply nationwide. He assured the public that these measures would positively impact price stability. This includes increased operating hours at loading depots, prompt clearance of vessels, and extended hours for truck operations.
Price Determined by Market Forces and Forex
NNPCL also issued a statement reaffirming that petrol prices are determined by market forces, as outlined in the Petroleum Industry Act (PIA). According to Adedapo Segun, Executive Vice President, Downstream of NNPCL, Section 205 of the PIA stipulates that petrol prices are regulated by free market dynamics, with the exchange rate playing a key role in price determination.
**Dangote Refinery and Local Production**
Segun further noted that the NNPCL is preparing to supply 17.6 million barrels of crude oil to Dangote Refinery between September and October 2024, as part of efforts to boost local petroleum production. This is expected to ease the pressure on petrol prices in the long term.
Despite these efforts, there have been calls from various sectors, including the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), for the government to reverse the recent price hike from N617 per litre to N897 per litre. Economists have also warned that the increase will push more Nigerians into poverty.
NNPCL, however, remains focused on maintaining adequate fuel supply and preventing product diversion to alleviate the impact of the price hike.
