Hopes for a reduction in the price of Premium Motor Spirit (PMS), popularly known as petrol, have been shattered as the Nigerian National Petroleum Company Ltd. (NNPC) announced new price bands for the newly-released Dangote petrol across the country.
The announcement, made in the early hours of Monday, has left many Nigerians disillusioned as the long-awaited relief from escalating fuel costs remains elusive.
According to the price template released by NNPC Ltd, petrol prices will vary across the country, with Borno State seeing a price as high as N1,019.22 per litre. Other states like Lagos will sell at N950.22, Oyo at N960.22, and Sokoto, the Federal Capital Territory (FCT), and Kaduna will see prices around N999.22 per litre. The new price bands come amidst a heated dispute between Dangote Refinery and NNPC Ltd. over petrol pricing, adding further strain to the wallets of millions of Nigerians already grappling with diminishing purchasing power.
The pricing conflict heightened on Sunday when NNPC Ltd., through its Chief Corporate Communications Officer, Mr. Olufemi Soneye, revealed that it had purchased petrol from Dangote Refinery at N898 per litre.
The statement was swiftly countered by Dangote Refinery’s Chief Branding and Communications Officer, Mr. Anthony Chiejina, who labeled the claim as “misleading and mischievous.”
Chiejina clarified that Dangote sold petrol to NNPC Ltd. in U.S. dollars, given that the crude used for production was purchased in dollars.
He stated, “Our attention has been drawn to a statement attributed to NNPC’s spokesperson, Mr. Olufemi Soneye, claiming that we sell our PMS at N898 per litre. This is not accurate and is aimed at undermining the milestone achieved by addressing Nigeria’s energy challenges.”
In response, Soneye reiterated that the price negotiation adhered to the provisions of the Petroleum Industry Act (PIA), which allows market-driven pricing.
He further explained that NNPC Ltd. is currently paying Dangote Refinery in US dollars, as naira transactions will only begin on October 1, 2024.
He added, “If there is any dispute over the quoted price, we would appreciate any discounts offered by Dangote Refinery, which will be fully passed on to the public.”
Meanwhile, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has strongly criticised NNPC Ltd.’s pricing strategy.
The National Welfare Officer of IPMAN, Mr. John Kekeocha, expressed frustration, arguing that it defies logic for NNPC to sell petrol sourced from Dangote Refinery at a higher price than imported fuel.
Opposition political groups, under the Coalition of United Political Parties (CUPP), amplified IPMAN’s concerns.
In a statement by CUPP’s National Publicity Secretary, Mr. Peter Ameh, the group questioned the N898 per litre price tag, arguing that it undermines the economic benefit of having an in-country refinery. Ameh noted that without freight charges and other tariffs, Dangote’s pricing should be significantly lower. CUPP called for an immediate probe by the National Assembly to investigate the lack of transparency surrounding fuel pricing.
Meanwhile, NNPC Ltd. has defended its position as the sole provider of PMS, attributing the situation to the scarcity and volatility of foreign exchange, which has discouraged independent oil marketers from participating in the market. Executive Vice President of NNPC Ltd.’s Downstream division, Adedapo Segun, explained that the lack of foreign exchange stability has forced NNPC to be the exclusive offtaker.
“I must clarify that NNPC is not the sole provider of petrol by choice. The absence of oil marketers in the market is due to the volatility of the foreign exchange rate, which makes it unfeasible for them to operate without incurring massive losses. For instance, if a marketer purchases products and the exchange rate shifts against them, the loss becomes immediate,” Segun stated.
He added that the situation worsened after the removal of fuel subsidies by the government in mid-2023. The fluctuating exchange rates led to a gap between the naira value and the cost of providing PMS, further complicating the pricing model.
According to experts, the ongoing price war between Dangote Refinery and NNPC Ltd. has left Nigerians in a state of uncertainty, with no clear resolution in sight. As fuel prices soar across the country, the impact on everyday life is expected to deepen, particularly for industries dependent on fuel, such as transportation, agriculture, and manufacturing.
The anticipated probe by the National Assembly, analysts opine, may provide some answers, but for now, Nigerians must brace themselves for further increases in the cost of petrol, while the broader implications of the Dangote-NNPC Ltd. standoff continue to unfold. (Daily Sun)
