The Nigerian National Petroleum Company Limited (NNPCL) has announced that it will begin lifting Premium Motor Spirit (PMS) from Dangote Petroleum Refinery on September 15. However, the company emphasized that the price of the product would be influenced by foreign exchange rates and market forces.
Despite recent claims of increased PMS supply due to vessel offloading, oil marketers reported a backlog of over 2,000 tankers awaiting loading at various NNPCL depots. The government, while acknowledging the supply boost, has ruled out price fixing for PMS.
Industry experts speculate that the government may have phased out the petrol subsidy given its recent stance on pricing. The NNPCL attributed the fluctuating prices to foreign exchange liquidity, emphasizing the free market forces governing the pricing of PMS as outlined in the Petroleum Industry Act.
The Executive Vice President of Downstream, NNPC, Adedapo Segun, said on Thursday during a live television programme that the current fuel scarcity was expected to “subside in a few days as more stations recalibrate and begin selling PMS.”
He said Section 205 of the PIA, which established NNPC, stipulated that petroleum prices were determined by unrestricted free market forces.
“The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices,” Segun added.
The Dangote petroleum
According to NNPCL’s Executive Vice President of Downstream, Adedapo Segun, the national oil company is anticipating the start of PMS lifting from Dangote Refinery on September 15. Segun mentioned that NNPCL has a vast network of nearly a thousand filling stations nationwide and is collaborating with marketers to “ensure that stations open early, close late, in order to maintain adequate fuel supply to meet the needs of Nigerians.”
“We are also engaging relevant authorities to ensure product diversions are prevented and timely deliveries to all stations are ensured. The scarcity should ease in the next few days as more stations recalibrate and begin operations,” he said.
IPMAN Reports Tanker Backlog
Mustapha Zarma, the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), has indicated that many IPMAN members have their trucks stranded at depots due to the ongoing delay in receiving PMS from NNPCL. This backlog of over 2,000 tankers has contributed to the persistent fuel scarcity in the country.
“The queues in Abuja are heavy. Nobody is loading. Right now, most of the tickets of independent marketers, which had been paid for since the last three months, have not been cleared to load,” Zarma said.
“And with the recent increase in the price of petrol, there has not been any official statement to say that this is the additional money you are supposed to pay before you lift your order. It is only the retail arm of NNPC that is lifting products to their stations.
“We have over 2,000 trucks that are at the various depots and they will not give you the product now until you pay up the difference. And up till now, they have not communicated to us what the difference is.”
This came as Dangote refinery announced on Thursday that NNPC had not started lifting its petrol.
In a statement, the Dangote Group Chief Branding and Communications Officer, Anthony Chiejina, debunked a report that NNPC was selling its petrol at N897/litre.
Chiejina said the attention of the group was drawn to a headline, ‘NNPC lifts Dangote petrol, sells at N897 per litre’, published by a national daily.
Dangote Refinery Denies NNPCL Petrol Lifting
Dangote Refinery has refuted claims that NNPCL has begun lifting its petrol. In a statement, the refinery’s Chief Branding and Communications Officer, Anthony Chiejina, dismissed a report circulating in a national daily that NNPCL was selling Dangote petrol at N897 per liter.
“We would like to state that NNPC has not commenced lifting of refined Premium Motor Spirit (PMS), commonly known as petrol, from our Dangote Petroleum Refinery.
“Therefore, the issue of fixing the price of petrol lifted from our refinery does not arise, as we are yet to finalise our contract with NNPC,” Chiejina stated.
“The PMS market is strictly regulated, which is known to all oil marketers and stakeholders in the sector, hence we cannot determine, fix, or influence the product price, which falls under the purview of relevant government authorities.
“We urge the public to disregard the headline as it is misleading and does not represent the true position in this matter. We are guaranteeing Nigerians of exceptionally high-quality petroleum products that will be readily available all over the country.”
NNPCL Supplies 30 Million Barrels of Crude to Dangote Refinery
The Nigerian National Petroleum Company Limited (NNPCL) has disclosed that it has supplied a total of 30 million barrels of crude oil to Dangote Refinery. The company plans to further supply 17 million barrels of crude in the coming period.
Adedapo Segun, the Executive Vice President of Downstream at NNPCL, revealed this information during an interview on Arise Television. He stated that the crude oil supply is in line with the Federal Government’s strategy to support local refineries. Segun added that NNPCL will supply 6.3 million barrels of crude in September and 11.3 million barrels in October.
“We have supplied about 30 million barrels to Dangote so far, 6.3 million this month, and we will supply 11.3 million in October,” he stated.
Segun noted that the 6.3 million barrels would be delivered in seven cargoes but expressed concern that the current pump price of petrol did not reflect market realities.
“The pump price today is not market reflective. NNPCL is the sole importer of PMS in the country, which is abnormal. We should be coming to a situation where the free market determines prices,” he said, stressing that market forces should drive fuel prices, rather than any single entity.
He clarified that NNPC’s role as the sole importer of petrol was not a deliberate decision by the company but a response to market conditions.
“Let me put it in proper perspective, NNPC is not a regulator. We didn’t put ourselves in the position of sole importer. We don’t determine who plays in the market. We decided to come in when others reduced their participation. It is not about us wanting to be monopolists,” Segun stated.
He explained that achieving a stable fuel supply and price would require perfect market conditions, including a more liquid foreign exchange market.
“Market conditions need to be perfect, and there needs to be FX liquidity,” he added, hinting that broader economic reforms might be needed to resolve the fuel pricing dilemma.
It was learnt that NNPC had been working closely with private refineries, such as Dangote, to ensure a steady supply of crude oil for processing.
“Once Dangote refinery begins the rollout of PMS and we at NNPC commence lifting, we will communicate the details,” NNPC spokesman, Olufemi Soneye, stated.
However, a Presidency source, who spoke on condition of anonymity because he was not authorized to speak on the matter said that Dangote and not the NNPC would determine the price of the product, insisting that the refinery would not sell below the cost price.
“It’s a private business, Dangote will determine the price of the product based on market realities,” our source said.
“The Federal Government has already intervened by asking NNPC to sell crude to Dangote in naira. So far, 30 million barrels of crude oil have been supplied to Dangote. Between now and October, Dangote’s refinery will receive 17.8 million barrels of crude from the Federal Government, in addition to the 30 million barrels already supplied.
“The Federal Government stated that going forward crude should be sold to Dangote in naira to alleviate the pressure of seeking foreign exchange. This also allows him to sell to marketers in naira. How else can the Federal Government intervene?
“Dangote claims that the Federal Government will determine his price, he is being economical with the truth. He certainly will not sell below his cost price.
“The only role of the government as a regulator is to ensure that businessmen like Dangote do not take undue advantage of Nigerians. The government will also ensure product quality and prevent Dangote from setting arbitrary prices. By implication, the government will not allow him to set arbitrary prices.”
Shettima Intervenes in Fuel Scarcity Crisis
The Minister of Petroleum Resources, Heineken Lokpobiri, has expressed optimism about a resolution to the ongoing fuel scarcity in Nigeria. Following a meeting with Vice President Kashim Shettima, NNPC CEO Mele Kyari, and NMDPRA Executive Director Ogbogu Ukoha, Lokpobiri stated that the government is working to ensure adequate petrol supply by the weekend.
The meeting was convened at the request of President Bola Tinubu, who is deeply concerned about the hardships faced by Nigerians due to the fuel shortage. Lokpobiri urged citizens to avoid panic buying, assuring them that prices will stabilize once the product becomes readily available
Lokpobiri stated, “What is important is for us to convey to Nigerians that the President is empathetic about what is going on in the country. He is concerned about the hardship of Nigerians, and that was why he directed the Vice President to call this meeting, for us to reflect on what is going on in the country.
“What is important is that products are available in the country, and we believe that between now and the weekend, there will be availability of products across the length and breadth of the country.
“The price could be high in some other areas, much higher in some other locations, and in some locations, much more than you know in other areas. But we believe that by the time there is availability of products across the country, the price itself is stabilised.”
He added, “What is important is that the government is not fixing prices. This sector is deregulated. And we believe that with the availability of products, the price will find its level. And this is important for Nigeria to know.
“There are enough products in the country to be able to meet the demands of Nigerians; there should be no panic buying. And we also believe that Nigerians need to know that the government is not fixing prices. That is what I want to convey to Nigerians,” he said.
Executive Director, NMDPRA, Ukoha, while speaking with State House correspondents, said, “All regulatory efforts are now geared towards stabilising supply, with a resultant impact that it will be positive also on the stability of price”.
“To that objective, the regulator is ensuring that there are increased operating hours from all loading depots, vessels are being cleared promptly, and extended hours where safety can permit, for truck outs as well.
“More important also is the reinforcement of the support being given to local refinance, because with increased production from them, indeed, like the minister has said, there will be higher supply, which will stabilize the price. That’s the effort that the regulator is making.”
This article was written by Tamaraebiju Jide, a student at Elizade University
