The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, said on Thursday the price of Premium Motor Spirit (PMS) would drop in the future due to competition among oil companies.
Kyari, who stated this during an interview on Arise TV, said with the removal of subsidy oil marketers would be able to import the product or buy from a producer refining crude oil in Nigeria.
He also addressed the recent increase in fuel prices by the NNPCL.
The company on Wednesday raised fuel pump prices from N189 per litre to N500 and above across the 36 states.
Kyari 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 subsidise 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 percent of the market going forward. As soon as the market stabilises, oil marketing companies are able to come in.
“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. I don’t see any doubt about this.”
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