Sequel to Tuesday’s abrupt increase on fuel price from N537 per litre to N617 per litre by the National Petroleum Company Limited (NNPCL), the company’s Group Chief Executive Officer, Mele Kyari, said the increase was caused by market forces.
The NNPCL who made this known to journalists after a closed-door meeting with Vice President Kashim Shettima at the State House, Abuja, said new price was a reflection on the market realities.
“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,” he said.
There were speculations that the increase may have been due to inadequate supply of the commodity but the NNPCL boss said it was not a supply issue.
“No,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 explained.
Another factor responsible for the increase according to the Chief Executive Officer (CEO), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, is the price hike to global crude oil prices increase.
Also, Ahmed said that changes in freight costs and other miscellaneous expenses that importers encounter during distribution contribute to price changes.
Ahmed said, “Basically, what we’re seeing is the effect of market forces. You can see that crude oil prices have been on the rise. Just a week ago, crude oil prices hovered around $70 per barrel, but now it’s surpassed $80 per barrel. So naturally, these prices also influence the cost of the product.”