By Ebere Inyama
(Lagos) Following the claim by NNPC that it purchased petrol from Dangote refinery at at N898 ($0.54) per litre, and the denial of that claim by Dangote refinery, marketers as well as consumers of the product in Nigeria have expressed worry over the controversy.
On Sunday 15 September, 2024, marketers of PMS (Premium Motor Spirit) commenced loading of the product at the Dangote refinery to be sold to consumers across the 36 states of Nigeria.
Despite ownership of four refineries and the expenditure of billions of dollars on turnaround maintenance, this marks the first time in nearly three decades that a significant portion of Nigeria’s fuel needs will be met domestically.
But the hopes of many Nigerians seem to have been dashed especially with the outrageous pricing template rolled out by the NNPCL which will compel consumers to purchase the product at a price higher than the price of imported petrol, TruthNigeria has learned.
Speaking during a Morning Breakfast programme on Channels Television on Monday 16th September, 2024, the National Welfare Officer for the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. John Kekeocha argued that it is unfair for the NNPCL to sell petrol produced locally from the Dangote refinery to Nigerians at a pump price higher than imported fuel.
But the Chief Corporate Communications Officer for NNPCL, Olufemi Soneye denied that the NNPC is responsible for fixing the prices of the products. According to him, PMS prices are not set by the government but are negotiated directly between parties in line with Section 206 (1) of the Petroleum Industry Act (PIA).
Due to the distance from the Dangote refinery to the various outlets in the country, the petrol prices listed by the NNPC ranges from N950.22 ($0.57) in Lagos state to N1,019.22 ($0.61) in Borno State.
In an interview with TruthNigeria, a petrol marketer who operates a fuel station in Owerri, the Imo state capital, Mr. Joseph Ikeme, said the present price arrangement by the NNPC will be applicable only to NNPC – owned fuel stations.
“We are yet to get delivery of petrol from the Dangote refinery, Ikeme began.
“The truth is that not all fuel stations will sell at the price recommended by the NNPC because some marketers who were not opportune to lift petrol directly from the depot will buy from other marketers at a price above N799. (Some major marketers often resell the products they lifted to smaller marketers at a profit and this enables them to make quick sale after which they return to the depot to lift more products)
“In this situation, you don’t expect them to sell petrol at the same price being sold at fuel stations owned by major marketers that lifted the product directly from the depot.
“Don’t forget that the sector has been deregulated and each marketer is expected to bear the cost of transporting the product to its retail outlet.
“By the time the product gets to all the states in Nigeria, you will find out that some fuel stations will sell the product for as much as N1200 ($0.72) in the Southern part of Nigeria and N1400 ($0.84) in some states in the north,” he said
NNPC Claims Return of Fuel Subsidy Despite High Cost of Petrol
Despite selling petrol at N799 ($0.48) per litre to marketers and approving petrol prices ranging between N980.22 ($0.59) and N1,019.22 ($0.61), the NNPC said the price of the product is being subsidized. (The major marketers involved in this arrangement include Conoil, NIPCO, Total, Mobil, Oando (NNPC Retail), Adova and Depots and Petroleum Products Marketers Association of Nigeria members).
“The market value of PMS is still higher than the N766 ($0.46) or N765 or N799 ($0.48) that NNPC is selling”, said Adedapo Segun, executive vice-president, downstream at NNPC during a press briefing on Monday, 16th September, 2024.
“So, there is no way the marketers would bring it in. There’s no way the marketers would also buy from Dangote”, Segun continued.
“Basically, the situation has not changed there. So, NNPC offtaking is only because the others would not buy at the price Dangote will be willing to sell, which is reasonable,” he said.
Lawmakers Flay NNPC, Dangote Over Fuel Price
The Minority Caucus of the House of Representatives has frowned at the fuel pricing arrangement announced by NNPC Ltd.
In a statement signed by the caucus leader, Mr. Kingsley Chinda on 17th September, 2024, the caucus described the new fuel price set by NNPCL as exploitative.
“We find this pricing regime to be not only burdensome but utterly unacceptable, particularly in light of the fact that this fuel is refined locally, “Chinda noted in the statement.
“The pricing of locally refined fuel should be significantly lower than imported fuel, as it lacks the incidental costs associated with landing charges, import duties, and other taxes.
“The current pricing arrangement, if allowed to persist, will only deepen the economic hardship experienced by millions of Nigerians and further undermine trust in the ability of local refineries to provide affordable solutions to the nation’s fuel needs,” the statement warned.
Stakeholders Raise Concern Over Petrol Price from Dangote Refinery
Reacting to the current price list released by NNPC, the President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dele Oye and the President of the Lagos Chamber of Commerce and Industry (LCCI), Gabriel Idahosa, expressed concern over the current price of petrol.
In statement on Monday 16th September, 2024, Oye noted that “The arrangement whereby NNPC is the sole buyer from the Dangote refinery contradicts the principles of a deregulated market and is in conflict with the government’s current position that they have deregulated the sector”.
According to him, “The conflicting statements between Dangote refinery and NNPC concerning the price of petrol may send negative signals to potential foreign and existing local investors”.
Speaking on the new petrol price template, the LCCI President, Gabriel Idahosa, noted that the new price template announced by the NNPC came at a time when Nigerians were enmeshed in hardship and hunger worsened by declining average income levels.
According to him, “It is difficult for the majority of Nigerians to afford the current price of the product. Therefore, the primary concern of every Nigerian should be how to achieve a reduction in the pump price of petrol?”
Ebere Inyama is an Imo state – based conflict reporter for TruthNigeria
