Nigeria may see another increase in petrol prices as the Nigerian National Petroleum Company (NNPC) Limited’s Executive Vice President (EVP) Downstream, Adedapo Segun, emphasizes the need for a shift to market-based pricing to eliminate persistent fuel queues. In an interview with ARISE NEWS on Thursday, Segun noted that the current price of N897 per litre still reflects a government subsidy and is not fully aligned with market conditions.
Earlier this week, NNPC raised the price of Premium Motor Spirit (PMS) from a range of N568-N617 to between N855 and N897 per litre. Segun highlighted that the Petroleum Industry Act (PIA) mandates fuel pricing to be determined by a free market, arguing that stagnant prices are an unusual occurrence that contradicts global trends. “In other regions, prices fluctuate with seasonal demand; this should also apply to Nigeria,” he stated.
While acknowledging that some countries enjoy lower petrol prices, Segun explained that Nigeria’s pricing does not yet reflect full market conditions. “We haven’t reached our full market pricing for PMS, and thus, comparisons shouldn’t be made directly with countries that have a completely market-driven system,” he said.
Segun reiterated the importance of transitioning to a free market model, where competition among suppliers could improve service quality and benefit consumers. “If we have unrestricted market conditions, there will be better competition, and the perception of entitlement among marketers will diminish,” he added.
He addressed ongoing fuel scarcity in the country, assuring that NNPC is working diligently to resolve the issue. “We’re collaborating with nearly a thousand stations nationwide to ensure they operate efficiently and are adequately supplied,” said Segun, emphasizing the company’s dedication to enhancing distribution.
Despite recent challenges related to payments and foreign exchange liquidity affecting petrol supply, Segun expressed optimism about maintaining supplier relationships. He acknowledged the company’s existing debt but refrained from commenting on the specifics, stating, “NNPC has never defaulted on payments, and our suppliers have confidence in our reliability.”
Additionally, he pointed to the impending operational launch of Dangote Refinery as a potential game-changer for the country’s fuel supply situation, which is poised to further stabilize the market.
As Nigeria navigates its complex fuel pricing landscape, the call for a more flexible, market-driven approach to pricing could herald significant changes in the coming months.
