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Fuel Pricing Controversy: ‘We Do Not Control Dangote Refinery’s Sales’ – NNPC

Published

3 months ago

Sep 7, 2024.

The Nigerian National Petroleum Company Limited (NNPC) has addressed recent allegations from the Muslim Rights Concern (MURIC) that its actions are hindering the operations of Dangote Refinery Limited (DRL).

In a statement issued on Saturday, Olufemi Soneye, the Chief Corporate Communications Officer of NNPC, rejected the accusations that fluctuations in the pump price of Premium Motor Spirit (PMS) would obstruct DRL’s ability to offer competitive prices.

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EKO HOT BLOG reports that NNPC emphasized that it does not have exclusive rights as the sole buyer of petroleum products in Nigeria. The company noted that the market remains open for competitive pricing from all local refineries, including DRL.

The statement clarified that product pricing from any refinery, including DRL, is influenced by global market conditions, and current high prices provide an opportunity for local refineries to potentially offer lower rates.

NNPC also dismissed claims that it is the exclusive offtaker of products from DRL, asserting that domestic refineries are free to sell directly to any marketer based on a “willing buyer, willing seller” model.

The NNPC reaffirmed its commitment to maintaining a transparent and competitive role in the market, ensuring no exclusive rights to distribute products from the Dangote Refinery.

The company statement reads: “The attention of the NNPC Ltd has been drawn to a press release by the Muslim Rights Concern, MURIC, which claims that the Dangote Refinery Limited (DRL) is being undermined by actions of the Nigerian National Petroleum Company Limited (NNPC Ltd). Specifically, MURIC asserts that recent changes to the pump price of Premium Motor Spirit (PMS) will prevent the Dangote Refinery from offering lower prices and that NNPC Ltd. has become the sole offtaker of all products from the refinery.

“To set the records straight, NNPC Ltd. wishes to further state as follows:

“1. The pricing of petroleum products from any refinery, including the Dangote Refinery Ltd. (DRL), is determined by global market forces. The recent changes in PMS prices have no impact on the DRL 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.

Fuel Dangote Refinery NNPC

“2. Furthermore, we emphasize 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 NNPC Ltd. will only fully offtake PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria. The DRL 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 offtaker does not arise.

“3. The NNPC Ltd. cannot undermine a business in which it holds a billion-dollar stake.

“4. As an advocacy group for fair and just treatment, MURIC should have verified the facts before making statements that are entirely flawed and has the potential to incite ordinary Nigerians against the NNPC Ltd.”