Fuel subsidy: Competition will force price of fuel down

The Group Chief Executive Officer, of the Nigeria National Petroleum Company Limited, NNPCL, Mr. Mele Kyari, has said prices of fuel would find their equilibrium with the open and competitive market.

Kyari spoke on Thursday in an interview on Arise TV’s Morning Show.

The recent increase in the petrol pump price occasioned by the discontinuance of petroleum subsidy saw queues return to fuel stations across Nigeria this week.

The NNPC had on Wednesday said it had adjusted the pump price of petrol to reflect the market realities.

Several retail outlets sold the product between 550 and N800 in Abuja, Lagos, Ogun and some other states across the federation.

But Kyari believes the removal of subsidies would create new entrants into the market and aid competition, and phase out monopolies.

Kyari said, “The beauty of this fuel 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.

“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.