FOLLOWING the recent hike in prices of Premium Motor Spirit (PMS), commonly called petrol, the Nigerian National Petroleum Company Limited (NNPC) has clarified that the offtake of the Dangote Refinery Limited does not guarantee a lowering of the petrol prices.
This was contained in a statement signed by the chief corporate communications oficer for NNPC, Olufemi Soneye, on September 7, 2024, following claims made by the Muslim Rights Concern (MURIC) regarding the NNPCL and Dangote refinery.
Recall that about four days ago, Dangote officially commenced the operationalisation of its refinery with plans to supply 25 million litres of petrol to the Nigerian market. However, this development subsequently,, raised the prices of fuel within the country from N650 to as high as N855 to N950.
The increased prices became a public outcry as Nigerians and union bodies began to question the pricing policies of NNPC.
MURIC accused the NNPCL of attempting to stifle competition by manipulating the pricing of fuel, thereby preventing the Dangote Refinery from offering lower petrol prices to Nigerians.
Reacting to these allegations, Soneye said that global market forces, not NNPC’s pricing decisions, determine the cost of petroleum products.
He added that the Dangote Refinery, like other refineries, operates in an open market and is free to set prices that reflect current market conditions.
“To set the records straight, NNPCL wishes to further state that the pricing of petroleum products from any refinery, including the Dangote Refinery, is determined by global market forces.
“The recent changes in PMS prices have no impact on the Dangote or any other domestic refinery’s access to the Nigerian market. In fact, if current prices are perceived as high, it presents an ideal opportunity for the refinery to sell its products at lower prices in the Nigerian market.
“We emphasise that there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL.
“The NNPCL will only fully offtake PMS from the Dangote Refinery if the market prices of PMS are higher than the pump prices in Nigeria. The Dangote and any other domestic refinery are free to sell directly to any marketer on a willing buyer, willing seller basis, which is the current practice for all fully deregulated products.
“NNPC Ltd has no desire or intention to become the distributor for any entity in a free market environment, and therefore, the notion of becoming a sole off-taker does not arise.”
The ICIR reported that marketers have held meetings with the Nigerian Petroleum regulatory authorities, seeking answers to possible market dominance by the NNPCL and Dangote Petrochemical Refinery.
They also want the NNPCL to commence publication of a pricing template that would guide marketers on appropriate pricing.
Kehinde Ogunyale tells stories by using data to hold power into account. You can send him a mail at [email protected] (jameskennyogunyale@gmail) or Twitter: Prof_KennyJames