Price Parity Achieved: Nigeria’s Fuel Subsidy Removal Yields Positive Results, Says Kyari
Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), has announced that the removal of the Premium Motor Spirit (PMS) subsidy has brought about price parity in the country. In a recent interview with journalists, Kyari revealed that the move has eliminated price arbitrage and driven out fuel smuggling to neighboring countries.
According to Channel Television, Kyari cited that the fuel subsidy system created differences in prices between locations, leading to fuel smuggling and profiteering. He explained that the removal of the subsidy has calib this problem, making it no longer profitable for smugglers to transport the product across borders.
The development follows a significant increase in fuel prices, with NNPCL retail outlets now selling fuel at N1,030 per liter, up from N898. The price hike, which began in June 2024, has seen the cost of fuel rise to above N517 per liter from around N238.
Kyari’s comments come as the country seeks to reform its fuel subsidy regime, which has been criticized for being ineffective and perpetuating inefficiencies in the market. By removing the subsidy, the government hopes to create a more transparent and competitive fuel market, where prices respond to supply and demand.
While the change has been met with some resistance from consumers, Kyari’s announcement suggests that the reforms are already having a positive impact on the market. As the situation evolves, it remains to be seen whether the government’s efforts will lead to a more sustainable and efficient fuel system in Nigeria.
