The Nigerian National Petroleum Company Limited (NNPCL) has explained that petrol pricing in Nigeria cannot be compared with other developed markets because the country still modulates pricing to support general affordability.

Executive Vice Chairman, Downstream, Nigerian National Petroleum Company Limited (NNPCL) Engr. Dapo Segun, said Nigeria is still not operating full pricing of the Premium Motor Spirit (PMS), otherwise known as petrol, which explains why Nigeria cannot be compared with other climes.

According to him, petrol prices are higher in other countries because they are solely market-driven.

“So, but the opposite is our situation. We’re not at a full market-pricing of PMS yet, and that’s why the behaviour of PMS prices in Nigeria cannot be compared to those markets where the prices are fully market-based.

“And if you’re going to do a comparison, you want to check out the equivalence of those prices you see in those climes and compare their prices here, you’ll find that they’re still way higher than the prices we are offering when you bring them to common currency,” Segun said.

He clarified that petrol availability remained scarce in some cities despite recent pump price hike as many retail outlets have been recalibrating their meters due to the increase in retail pump price.

According to him, it takes some days for the filling to get the meters recalibrated.

He was optimistic that in a few days the queues will disappear.

“When you have a situation, when you have a price change situation, it takes a few days for all the filling stations to recalibrate their meters to that basically is the situation we are in now,” he said.

He said petrol prices are largely determined by seasons, stressing there are bound to be higher prices in winter due to increased demand for energy than in summer.

“During the summer months, prices are high because it’s a driving season. In the winter months, your prices come down and things like that. So that’s what the PIA provides for and prices should move with the seasons,” Segun said in an interview on Arise News Morning Show.

He said the NNPCL has been working hard to ensure that the product is delivered to marketers by opening early and closing late.

He also said the state-owned is working hard to prevent diversion of the petrol to unscheduled destinations.

His words: “We are working with all the marketers, engaging with them to ensure our fuel marketers to ensure all the fuel stations open early and close late, and make sure that there is fuel in all of the filling stations. So, we are ensuring that deliveries are made to stations

“And we are doing our best to ensure that there is no diversions…

“I expect that this will fizzle out within the next few days as more stations calibrate and begin to sell.

“If you look in section 12 (5) of the PIA and that is the act that gave birth to NNPCL, it tells you that petroleum prices of fuel prices will base on unrestricted market conditions.”

On debt owed to PMS suppliers, he said the company has a good relationship with the refiners because it has earned their confidence over the years.

Segun who admitted there may be challenges, blamed it all on forex illiquidity in the market.

Despite that, he said NNPCL is making payments to the suppliers

“We do what we can to make sure that we are within the confidence of our suppliers.

“I can assure you that our suppliers have confidence in our ability to pay. NNPCL has never defaulted in making its payments and that is why our suppliers continue to back us up,” Segun said.

Credit: punchng.com

Petrol Price Uncertainty: NNPCL Reveals Market Forces Will Dictate Costs

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