Nigeria: NNPC Reduces Fuel Price to N108 Per Litre

• Nigeria’s state-owned oil company, NNPC, has reduced the price of fuel from N113.28k per litre to N108.00k per litre, marking a 4.8 per cent decrease in prices.
• This is the second time in around two months that the NNPC has lowered fuel prices. 
• Oil prices dropped to all-time lows in April, creating a call for an automatic fuel price cut in line with market forces as seen in countries with a deregulated economy.

Nigeria’s state-owned oil company, NNPC, has decreased the fuel price from N113.28k per litre to N108.00k per litre, marking a 4.8 per cent decrease in prices.

This is the second time in around two months that the NNPC has lowered fuel prices. On 19 March 2020, the NNPC announced a decrease from N133.28/litre to N113.28/litre.

The new drop was confirmed by the NNPC’s twitter on Wednesday and was provided by Group General Manager, Public Relations Division, Dr. Kennie Obateru, who quoted Musa Lawan, Managing Director of the Petroleum Products Marketing Company (PPMC).

According to Dr. Obateru, “the new ex-depot price of Premium Motor Spirit (PMS), otherwise called petrol, reflects the company’s market strategy to make more sales while complying with the Petroleum Products Pricing Regulatory Agency’s (PPPRA) price template.”

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He further clarified  “the new price regime would enable PPMC to boost its sales volumes from the billions of litres of Petrol it has in storage while providing affordable price to millions of customers.”

He explained how they had arrived at the present price, saying that “after an extensive review of market realities by the PPMC internal price review unit.”

The NNPC GMD Mallam Mele Kyari had alluded to the potential abolition of Nigeria’s fuel price subsidies back in April, creating hopes that Nigeria should abandon a long-standing government strategy of spending trillions of naira subsidizing petrol. Nonetheless, this move suggests that the government still wants to control the petrol price instead of allowing the market to decide the price just as it is for AGO otherwise known as diesel.

On diesel, the PPMC MD Musa Lawan clarified that the price of diesel has not been affected, as it has been deregulated and decided by market forces.

Oil prices dropped to all-time lows in April, creating a call for an automatic fuel price cut in line with market forces as seen in countries with a deregulated economy.