Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has predicted that competition between significant participants in the oil industry would drive down petrol prices rather than the increasing trends that have sparked concern in the nation.
The NNPC announced earlier on Wednesday that it had changed the price of petrol at the pump to reflect market conditions. However, the agency omitted to announce the updated petrol pricing.
However, a number of retail establishments in Lagos, Abuja, Ogun, and other states offered the product for between 600 and N800.
In an interview with Arise TV’s Morning Show on Thursday, Kyari said the elimination of subsidies would permit new entrants into the market, a move that would help competition and gradually phase out monopoly.
The NNPC Chief said, “The beauty of this (subsidy removal) is that there will be new entrants (into the market) because oil marketing companies’ reluctance to come into the market all along is the very fact of the subsidy regime that is in place.
“And that subsidy regime doesn’t have a guarantee of repayment back to those who provide the product at subsidized price and now that the market is being regulated, oil marketing companies can actually import product or even if it is produced locally, they can buy and take it into the market and sell it at its retail price.
“Therefore, you will see competition, even with NNPC. And by the way, by law, NNPC cannot do more than 30 per cent of the market going forward. As soon as the market stabilises, oil marketing companies are able to come in.”
Kyari further explained that, “Competition will definitely come in and the market will regulate the prices itself. Therefore, this is just an instantaneous price and within a week or two, you will continue to see different prices because of different approaches from major players, companies have different approaches to it and competition will guide that. Ultimately, you’d see changes downwards and it is very likely because efficiency will come in.
“As soon as competition comes in, people will become more efficient in their depots, in managing their trucks and in managing their fuel stations so that people can come to their stations. And it is showing already, right now, you will see motorists going to stations where they can have price differences, so this will regulate the market and on its own, the price will come down naturally and I don’t see any doubt about this.”