NNPC justifies increase in pump price, says market forces at work

The recent increase in the price of Premium Motor Spirit (PMS), also known as petrol, in Nigeria has sparked significant public outcry and debate. The adjustment, from N540 to N617 per litre, comes less than two months after the Nigerian National Petroleum Company Limited (NNPCL) announced an upward review of the product from N194 to N488 and later to N555. This move followed the removal of fuel subsidy by President Bola Tinubu during his May 29 inauguration, which led to the deregulation of the petroleum market.

The sharp and frequent increases in petrol prices have triggered anger and condemnation among some Nigerians who believe it will lead to increased hardships for the already struggling masses. Social media platforms have been flooded with expressions of frustration and disappointment, with many citizens expressing their grievances over the lack of relief from the rising cost of living.

Critics argue that the current administration promised “Renewed Hope” during its election campaign, but the continuous increase in petrol prices seems to be delivering the opposite – “renewed suffering” to the populace. The timing of these increases, amid economic challenges and soaring inflation rates, adds to the frustration of the citizens.

In response to the public discontent, the Nigerian National Petroleum Company Limited’s Group Chief Executive Officer, Mele Kyari, addressed the issue. He explained that the price adjustments are driven by market realities, and the company’s Marketing Wing is responsible for setting prices based on prevailing market conditions. Kyari stressed that the increase in petrol prices is not due to supply issues, as there is a robust supply of the product in the country.

Additionally, Kyari highlighted that many companies have imported petroleum products, and private sector players have confidence in the market. The deregulated market has allowed various companies to import products, fostering competition that, in theory, should lead to lower prices. However, it remains to be seen how the market will behave in practice, especially with the ongoing global economic challenges and geopolitical factors impacting crude oil prices.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has also clarified its position on the issue. The authority, as a regulator, does not set the price of petroleum products. Instead, it oversees the market and ensures adherence to quality standards. The NMDPRA has encouraged competition among importers and emphasized that it does not impose price caps, leaving the pricing to market forces.

Despite the explanations given by the NNPC and NMDPRA, the discontent among Nigerians persists, with many citizens expressing their displeasure over the unrelenting rise in petrol prices. Some are questioning the timing and sincerity of the policy decisions, especially in the context of the already challenging economic situation in the country.

In conclusion, the increase in petrol prices in Nigeria has become a contentious issue, with citizens expressing their frustrations and concerns over the economic impact on their livelihoods. The government’s decision to deregulate the petroleum market and allow market forces to determine prices has stirred both support and criticism. As the situation unfolds, it remains to be seen how the market will respond and how the government will address the concerns of the citizens amid the rising cost of living.