Nigerians are eagerly awaiting the release of Premium Motor Spirit (PMS), commonly known as petrol, from the $20 billion Dangote Petroleum Refinery.
However, the Nigerian National Petroleum Company Limited (NNPC) has announced that the product’s price will be influenced by the foreign exchange rate and other market forces. This announcement comes as the NNPC prepares to lift petrol from the Dangote refinery on September 15, 2024.
NNPC’s Executive Vice President of Downstream, Adedapo Segun, emphasized that the market had been deregulated, meaning that petrol prices are no longer controlled by the government or NNPC but by market dynamics.
Segun stated, “The exchange rate plays a significant role in influencing these prices.”
He noted that the current fuel scarcity should ease as more stations recalibrate and begin selling PMS.
The announcement coincides with reports from oil marketers indicating that approximately 2,000 tankers are waiting to load petrol at various NNPC depots in Lagos, Warri, and Port Harcourt.
Mustapha Zarma, National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), disclosed that many trucks have been trapped at these depots for months due to delays in product allocation by NNPC.
Zarma ssid, “The queues in Abuja are heavy. Nobody is loading.” This highlights the frustration among independent marketers.
Adding to the complexity, the Dangote Group clarified that NNPC has not yet commenced lifting petrol from its refinery. In a statement, Anthony Chiejina, the Chief Branding and Communications Officer of the Dangote Group, debunked reports that NNPC was selling petrol at N897 per liter.
Chiejina explained, “The issue of fixing the price of petrol lifted from our refinery does not arise, as we are yet to finalize our contract with NNPC.” He urged the public to disregard misleading headlines.
The Dangote Refinery has received 30 million barrels of crude oil from NNPC so far, with plans to supply an additional 17 million barrels by October. This supply is part of the Federal Government’s strategy to ensure that local refineries, including Dangote, have adequate crude for processing.
Segun confirmed that 6.3 million barrels would be delivered in September, followed by 11.3 million barrels in October.
Despite these efforts, Segun expressed concern that the current pump price of petrol does not reflect market realities, pointing out that NNPC’s role as the sole importer of petrol in Nigeria is an abnormal situation. He stressed the need for a free market where prices are determined by market forces rather than any single entity.
Meanwhile, the Federal Government has ruled out any involvement in fixing petrol prices, emphasizing that the sector is deregulated. Heineken Lokpobiri, the Minister for Petroleum Resources, reiterated this position after a meeting with Vice President Kashim Shettima and other top officials at the State House on Thursday.
Lokpobiri assured Nigerians that there would be a significant supply of petrol by the weekend. Therefore, he urged the public to avoid panic buying. He said, “We believe that between now and the weekend, there will be availability of products across the length and breadth of the country.”
The position of the government has led to speculation that petrol subsidies may have ended, with market forces now fully determining fuel prices. A source from the Presidency, who preferred to remain anonymous, confirmed that Dangote would set the price of its petrol based on market realities. While the Federal Government’s role is limited to regulating and ensuring quality.