THE Nigerian National Petroleum Company Limited (NNPCL) on Wednesday, October 8, hiked the litre price of petrol across its retail outlets.
The ICIR gathered that some NNPCL outlets raised the price to N998 in Lagos State and N1,003 in Abuja, and the price could be higher in Sokoto and Borno states.
Until now, the NNPCL had sold the product for N855 in Lagos. The new development resulted from the anticipated total deregulation of the sector, which removes the NNPCL as the middleman and permits independent marketers to purchase the product directly from the Dangote Refinery.
Reports indicate that fuel stations owned by independent marketers are also adjusting their prices beyond N1,000.
The spokesperson of the NNPCL, Olufemi Soneye, did not pick up calls and did not respond to text messages for comments when contacted by our reporter on Wednesday.
The state-owned oil company had, on September 4, hiked the pump price, which resulted in an adjustment by oil marketers to above N1,000, which made transportation costs jump by over 50 per cent or more.
Its executive vice president, downstream, Adedapo Segun, on September 5, said Nigerians should expect a potential hike in the pump price as the NNPCL moved towards a market-reflective price.
Deregulating the oil sector
The pump price hike by the NNPCL comes barely three days after the state-owned oil company reportedly pulled out from the sole off-taker arrangement with the Dangote Refinery, although no official statement has yet been released from any of the parties.
However, the NNPCL action raises concern about whether Nigeria’s downstream oil and gas sector is now fully deregulated as previously indicated by the government.
In a recent conversation, the minister of state for petroleum resources (Oil), Heineken Lokpobiri, reiterated that the Nigerian oil and gas sector had been fully deregulated
“The oil and gas sector is fully deregulated, and the Nigerian government remains committed to promoting in-country refining.
“We encourage companies, including NNPCL, to operate independently, following global best practices,” Lokpobiri said.
Experts views
Commenting on the NNPCL pump price adjustment and whether the oil and gas sector has been fully deregulated, an economist, Muda Yusuf, explained that if the NNPCL had quit its off-taker arrangement and subsequently hiked the pump price of petrol in its retail outlets, it means the industry has been deregulated.
“However, whether we are ready for that now is another concern,” Yusuf pointed out.
He said the NNPCL should have considered the social and political implications the hike in the pump price would have on the economy rather than focusing on the commercial benefits.
An energy expert, Joe Nwakwue, believes that full deregulation would be attained only when prices are set by market forces and that requires market competition.
“We are on the journey to full-price deregulation,” he added.
Marcus bears the light, and he beams it everywhere. He's a good governance and decent society advocate. He's The ICIR Reporter of the Year 2022 and has been the organisation's News Editor since September 2023. Contact him via email @ [email protected]