The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL) Mele Kyari, has asserted that the removal of the Premium Motor Spirit (PMS) subsidy by President Bola Ahmed Tinubu’s administration has resulted in significant price parity within the fuel market.
In a recent interview, Kyari addressed the recent increase in fuel prices at NNPCL retail outlets, which surged from N898 to N1,030 per liter. He explained that the subsidy, in place for over 40 years, had created price arbitrage—discrepancies in fuel prices that incentivized smuggling across Nigeria’s borders.
“When Mr. President announced the removal of fuel subsidy in June, it calibrated prices,” Kyari stated, emphasizing that the removal has effectively eliminated the value proposition for smuggling fuel to neighboring countries.
Since the subsidy was lifted in June 2024, the price of fuel jumped from approximately N238 to over N517 per liter, with further increases culminating in the current price of N1,030 per liter in Abuja.
Kyari noted that this adjustment marks a crucial shift in the fuel market landscape, promoting fairness in pricing and reducing the incentives for illegal fuel trade.
