Our reporter/ The Nigeria National Petroleum Company Limited [NNPCL] on Saturday said it will not be the sole buyer of petrol from Dangote refinery but would step in if the facility sold above pump prices.
The 650,000 barrel-per-day capacity Dangote refinery started producing petrol earlier this week, raising expectations that this would end decades of the country relying on imports, which cost billions of dollars yearly.
The refinery had said NNPC would be the sole buyer of its petrol, also known as premium motor spirit (PMS) and that the government would set prices.
But in a statement sent to Alabingo.com, the oil giant confirmed that Dangote would determine the price of its petrol and could sell directly to marketers, who buy in bulk and distribute to fuel stations.
Until now, NNPC was sole importer of gasoline into Nigeria.
The state oil corporation on Tuesday increased the price of petrol from an average N617 naira a litre to N855 per litre.
Dangote will initially supply 25 million litres of gasoline daily into the domestic market this month, increasing to 30 million litres from October.
“The NNPC Ltd. will only fully offtake PMS from the DRL (Dangote Refinery Ltd) if the market prices of PMS are higher than the pump prices in Nigeria,” NNPC said in the statement on Saturday.
The full text of the statement is published below…
NNPC Ltd Not the Sole Offtaker; Market Open to Lower Prices from Any Domestic Refinery
The attention of the 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). Specifically, 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.
To set the records straight, NNPC Ltd wishes to further state as follows:
1. The pricing of petroleum products from any refinery, including the Dangote Refinery Ltd (DRL), is determined by global market forces. The 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.
2. Furthermore, we emphasize that there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL. The 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 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.
3. The NNPC Ltd cannot undermine a business in which it holds a billion-dollar stake.
4. As an advocacy group for fair and just treatment, MURIC should have verified the facts before making statements that are entirely flawed and has the potential to incite ordinary Nigerians against the NNPC Ltd.
Olufemi Soneye
Chief Corporate Communications Officer
NNPC Ltd
Abuja
6th September, 2024
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