In a recent statement, the Nigerian National Petroleum Company Limited (NNPC Ltd) has addressed concerns raised by the Muslim Rights Concern (MURIC) regarding the Dangote Refinery Limited (DRL) and the pricing of Premium Motor Spirit (PMS) in Nigeria.
MURIC had alleged that NNPC Ltd's actions, particularly the recent changes in pump prices, were undermining the Dangote Refinery's ability to offer lower prices and that NNPC Ltd had become the sole offtaker of all products from the refinery.
NNPC Ltd, in a press statement signed by Olufemi Soneye, its Chief Corporate Communications Officer clarified several key points to set the record straight, among which is that the pricing of petroleum products, including those from the Dangote Refinery, is determined by global market forces.
NNPC, in the statement, argued that the recent price adjustments do not hinder the DRL, or any other domestic refinery, from selling their products at lower prices in the Nigerian market.
In fact, high current prices, it further noted, present an opportunity for domestic refineries to offer competitive pricing.
Below is the full text of the statement by NNPC:
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.
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