As the much-anticipated supply of petrol from the $20 billion Dangote Petroleum Refinery draws closer, the Nigerian National Petroleum Company Limited (NNPC) has confirmed it will start lifting Premium Motor Spirit (PMS) from the refinery on September 15.
The NNPC, however, pointed out that the price of petrol will be influenced by several factors, including foreign exchange rates and market dynamics, as the market is now deregulated.
This update came alongside concerns raised by oil marketers, who reported that approximately 2,000 tankers were still on standby to collect petrol from NNPC depots located in Lagos, Warri, and Port Harcourt. The Federal Government also assured the public that petrol supplies would increase significantly over the weekend, as vessels were already offloading, though they ruled out the possibility of setting fixed prices for PMS.
The NNPC emphasized that the current price fluctuations in petrol were largely driven by the scarcity of foreign exchange and market forces. These developments are aligned with the deregulation of the petroleum sector under the Petroleum Industry Act (PIA).
The Executive Vice President of Downstream, NNPC, Adedapo Segun, elaborated on this during a live interview, noting that the ongoing fuel shortages should begin to ease in the coming days as more fuel stations recalibrate and resume full operations.
According to Segun, Section 205 of the PIA mandates that the pricing of petroleum products must be governed by unrestricted market forces. “The deregulation of the market means that prices are no longer controlled by the government or NNPC Ltd. Exchange rates, in particular, play a crucial role in determining these prices,” Segun said.
On the impending commencement of PMS lifting from the Dangote Refinery, Segun confirmed that NNPC was prepared to meet the refinery’s September 15 timeline.
He further assured that the NNPC, in collaboration with marketers, was working to ensure that fuel stations across the country would maintain long operating hours to meet demand. Additionally, efforts are being made to prevent product diversions and ensure timely deliveries to stations nationwide.
However, Mustapha Zarma, National Operations Controller for the Independent Petroleum Marketers Association of Nigeria, expressed frustration over the long queues of trucks at depots awaiting petrol. Zarma explained that numerous tickets, which had been paid for by independent marketers months earlier, were still pending clearance, leading to delays in loading.
He also mentioned that there was a lack of communication regarding price adjustments in light of recent petrol price increases, adding that only NNPC’s retail arm was currently lifting products.
Meanwhile, the Dangote Refinery clarified that NNPC had not yet started lifting petrol from its facility. The Dangote Group’s Chief Branding and Communications Officer, Anthony Chiejina, refuted reports suggesting that NNPC had begun selling petrol from the refinery at N897 per litre. He emphasized that Dangote Refinery was yet to finalize any contract with NNPC for petrol lifting and that it had no role in determining fuel prices, which falls under the purview of regulatory authorities.
In a related development, NNPC disclosed that it had already supplied the Dangote Refinery with 30 million barrels of crude oil, with plans to provide an additional 17 million barrels soon.
According to Segun, this initiative is part of the government’s strategy to support local refineries by ensuring a steady supply of crude oil for processing. He also pointed out that the current pump price of petrol does not fully reflect market conditions and reiterated that fuel prices should ideally be determined by market forces rather than any single entity.
As for the pricing of petrol from Dangote Refinery, an anonymous source within the Presidency hinted that Dangote, as a private entity, would be responsible for setting the price based on market realities. The source added that while the government has taken steps to alleviate foreign exchange pressures by allowing NNPC to sell crude to Dangote in naira, Dangote’s pricing will still need to cover production costs, though it will be regulated to prevent exploitation.
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