The CEO of the Nigerian National Petroleum Company Limited, Mele Kyari, has assured citizens that competition in the oil sector will drive down the price of petrol, which has been causing concern due to its recent increases.
Recalling, the NNPC has adjusted the pump price of petrol to reflect market conditions.
Meanwhile, talks between the government and labour union over the removal of fuel subsidy have ended without a consensus.
Speaking on Thursday in an interview on Arise TV’s Morning Show, Kyari said the removal of subsidy would allow new entrants into the market, a move he said, would aid competition and phased out monopoly.
This, he claimed, would ensure healthy competition which would ultimately lead to a downward review of pump prices of petroleum across the country.
“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 the 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 per cent of the market going forward. As soon as the market stabilises, oil marketing companies are able to 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.
On why fuel stations hiked their pump price when they still have in stock already subsidised products, the NNPL boss said: “This is the reality of the market. It applies to every commodity and not just petroleum.
“It could have been the other way round, prices could have collapsed downwards and those holding the old stock will have to sell at lower prices to arrive at market condition.
“It is not something serious or strange, this is a stock management issue and it is very typical, no one can do anything different about this.