October 13, (THEWILL) – Announcing increases in pump prices of petrol only and failing to announce decreases in the face of glaring evidence to the contrary does not necessarily mean that market forces are operating, but it is evidence of price manipulation. In the last two months, the Nigeria National Petroleum Company Limited announced increases in fuel prices three times. It did so before the coming on stream of the 650,000 barrel- per- day Dangote Refinery and twice afterwards.
Shortly after the first set of increases, the Executive Vice President of Downstream, NNPCL, Mr Adedapo Segun, stated that Section 205 of the Petroleum Industry Act, PIA, which established the Company stipulates that prices of petrol are determined by free market forces in Nigeria, adding that the exchange rate now plays a major part in influencing the pump prices.
Discerning Nigerians are aware of the fight over pricing between the new refinery and NNPCL on Sunday, September 15, 2024 with an initial lifting of 25 million litres by the latter. While both of them were arguing over what quantity was bought and for what, the NNPCL, on the next day, September 16, announced a new pump price of petrol.
During the price war between the duo, the NNPCL Spokesperson, Olufemi Soneye said the company bought the product at N898 per litre from Dangote, while the refinery’s spokesperson, Anthony Chiejina, denounced Soneye as being “mischievous and misleading” with the transaction, adding that only the technician committee set up by President Bola Tinubu on the sale of crude in Naira can fix the rate and price.
Predictably, the NNPCL, whose officials had earlier warned Nigerians that the product’s availability will be determined by market forces and the forex rate, got the upper hand of the fight it started with the refinery over who controls, regulates and supplies the product to the country’ s market, by announcing a new price regime, starting Monday, September 16, 2024.
Soneye in a statement for Monday 16, titled “NNPC Ltd Releases Estimated Pump Prices of PMS from Dangote Refinery, based on September 2024 Pricing, said: “The NNPC Ltd has released estimated prices of Premium Motor Spirit (PMS), also known as Petrol (obtained from the Dangote Refinery) in its retail stations across the country.
“The NNPC Ltd also wishes to state that, in line with the provisions of the Petroleum Industry Act (PIA), PMS prices are not set by government, but negotiated directly between parties on an arm’s length. The NNPC Ltd can confirm that it is paying Dangote Refinery in USD for September 2024 PMS offtake, as Naira transactions will only commence on October 1st, 2024.
“The NNPC Ltd assures that if the quoted pricing is disputed, it will be grateful for any discount from the Dangote Refinery, which will be passed on 100 per cent to the general public. Attached to this statement are the estimated pump prices of PMS (obtained from the Dangote Refinery) across NNPC Retail Stations in the country, based on September 2024 pricing.”
The announced retail price of petrol nationwide is as follows; Lagos – N950.22 Per Litre, Oyo – N960.22, FCT/Kaduna/Kano – N992.22, Imo/Rivers – N980.22, Sokoto – N999.22 and Borno – 1, 019.22.
In flagrant disobedience of the so-called PIA Act, it often quotes to legitimise its actions, the Company on October 8, 2024 announced another increase for fuel refined by Dangote Refinery; at N989 in Lagos and N1,030 for the Federal Capital Territory, Abuja and consequential increases for other states across the country.
In sharp contrast, South Africa, which is a non-oil producing country, announced another reduction in petrol price in October. In line with the rule of law and civilised standards, the country’s Department for Mineral Resources and Energy announced another reduction of fuel prices for October, 2024.
According to it, the price of 95-octane petrol in Gauteng will drop from R22.19 per litre to R21.05. On the coast, where a litre of 95 petrol previously cost R21.40 in September, the price will now decrease to R20.26 in October.
The reason for this civilised conduct was that Brent Crude oil price fell from 78.54 USD to 72.82 USD per barrel in the international petroleum Product prices during the review period. So, whether imported or locally refined, NNPCL fixes prices for fuel and never allows market prices to work. This can only happen in a lawless country.
