The Nigerian National Petroleum Corporation (NNPC) has declared that the subsidy regime in petroleum products pricing is over.
“Subsidy and under-recovery are zero today and it is zero forever,” Mele Kyari, the state-owned corporation’s chief said on a live programme with Abuja-based African Independent Television (AIT) on Monday.
The NNPC boss noted that given the current volatility in the international oil market, petroleum products’ prices would henceforth be decided by market dynamics.
Twice in 20 days, government slashed the price of gasoline by a margin of N21.50, a palliative measure the Petroleum Products Pricing Regulatory Agency (PPPRA) claimed was necessitated by the global slump in oil prices.
Kyari confirmed that despite the fact that the function of fixing the prices of refined products did not belong to the NNPC, Nigeria was increasingly evolving to a state where the forces of demand and supply would naturally determine the prices of petrol.
He stated that different variables accounted for determining the prices of refined products, observing that a plunge in oil price would not reflect in pump price instantly but usually between three to four weeks.
“I don’t see oil price going below the $20 per barrel price that we saw last week. I’m certain, all things being equal, oil price will bounce back.”
According to him, the corporation is optimistic about expanding Nigeria’s daily oil production capacity to three million barrels.
“As of yesterday, our production has, for the first time in many months and years, risen to 2.3mbpd,” Mr Kyari said.