NNPC to MURIC: We don’t have monopoly on fuel purchase, domestic refineries can offer lower prices

VANGUARD

The Nigerian National Petroleum Company Limited (NNPC Ltd) has responded to a press release by the Muslim Rights Concern (MURIC), which alleged that the Dangote Refinery Limited (DRL) is being unfairly disadvantaged by NNPC’s actions.

In a statement signed by Olufemi Soneye, NNPC’s Chief Corporate Communications Officer, the company clarified that petroleum product pricing, including that from the Dangote Refinery, is driven by global market dynamics, not by NNPC’s involvement.

MURIC had suggested that recent adjustments in the pump price of Premium Motor Spirit (PMS) would prevent the Dangote Refinery from offering competitive prices and claimed that NNPC had become the sole offtaker for the refinery’s products.

In its response, NNPC Ltd provided the following clarifications, “To set the records straight, NNPC Ltd wishes to further state as follows: 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.

“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.

“The NNPC Ltd cannot undermine a business in which it holds a billion-dollar stake.