The Nigerian National Petroleum Company Limited (NNPC) has asked Nigerians to manage their expectations of any future cost reduction in the recent hike in petrol prices across the country, clarifying that the pricing of petroleum products, including those from the Dangote Refinery, is dictated by global market forces.
Responding to rumours that NNPC intends to monopolize the offtake of products from the Dangote Refinery, the company stressed that there is no guarantee that domestic refining will lead to lower fuel prices.
In a statement titled “NNPC Ltd Not the Sole Offtaker; Market Open to Lower Prices from Any Domestic Refinery”, Olufemi Soneye, Chief Corporate Communications Officer, said, “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).”
“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,” he added.
To clarify, NNPC explained that “The pricing of petroleum products from any refinery, including the Dangote Refinery Ltd. (DRL), is determined by global market forces.”
“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,” the company argued.
NNPC also said, “There is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL.”
Furthermore, the company made it clear that “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 assured that it has no intention of monopolizing distribution in the deregulated market, saying, “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.”
“As an advocacy group for fair and just treatment, MURIC should have verified the facts before making statements that are entirely flawed and have the potential to incite ordinary Nigerians against the NNPC Ltd,” the statement added.
