The Nigerian National Petroleum Company Limited (NNPC Ltd.) has firmly countered claims made by billionaire businessman Aliko Dangote, asserting that the prices of Premium Motor Spirit (PMS) are governed by free market forces, not fixed by the NNPC.
In a recent television appearance on TVC News’ “Journalists’ Hangout” show, Mr. Adedapo Segun, the Executive Vice President of Downstream at NNPC Ltd., addressed concerns surrounding the fluctuation in PMS prices and the ongoing fuel scarcity.
His comments came in response to Dangote’s assertion that the NNPC has the power to set fuel prices.
According to Segun, the current pricing of PMS is influenced by market dynamics, which include foreign exchange (forex) rates and other market conditions.
This approach follows the guidelines established in the Petroleum Industry Act (PIA) of 2021, which deregulated the petroleum sector.
“The market has been deregulated,” Segun explained. “This means that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices.”
Under the PIA, NNPC Ltd. no longer controls or fixes fuel prices. Instead, the prices are subject to market conditions, which include the interplay of supply and demand and forex fluctuations.
This deregulation aims to create a more competitive and transparent market for petroleum products.
One of the key factors affecting PMS prices is forex illiquidity, which refers to difficulties in accessing foreign exchange.
This issue impacts the cost of importing petroleum products, which in turn affects the retail price at the pump.
Segun highlighted that the ongoing fuel scarcity is partly due to these forex issues.
“Foreign exchange illiquidity has been a significant factor influencing the fluctuation in prices,” he said. “We are working hard to address these challenges and ensure a stable supply of fuel.”
In light of the current fuel scarcity, Segun assured Nigerians that the situation would improve soon.
He mentioned that NNPC Ltd. has nearly a thousand filling stations across the country and is working with fuel marketers to address the issue.
“We are collaborating with marketers to ensure that stations open early and close late,” Segun said.
“This will help maintain an adequate fuel supply to meet the needs of Nigerians.”
Additionally, Segun mentioned that NNPC Ltd. is engaging with relevant authorities to prevent product diversions and ensure timely deliveries to filling stations.
The goal is to ease the scarcity within the coming days as more stations recalibrate their operations.
Regarding the new Dangote Refinery, Segun noted that NNPC Ltd. is awaiting the refinery’s planned operations.
The refinery is expected to commence lifting PMS on September 15th, which is anticipated to have a positive impact on fuel supply.
“The NNPC Ltd. is looking forward to the commencement of PMS lifting from the Dangote Refinery,” Segun said.
“This will help to stabilize the supply and pricing of petrol.”
The Petroleum Industry Act (PIA), enacted in 2021, represents a significant overhaul of Nigeria’s oil and gas sector.
It aims to attract investment, promote transparency, and ensure efficient management of petroleum resources.
One of the key provisions of the PIA is the deregulation of the downstream sector, which includes the pricing of petroleum products.
The act removed the government’s control over fuel prices, allowing them to be determined by market forces.
This shift was intended to encourage competition and improve service delivery in the petroleum sector.
The deregulation of fuel prices has been a topic of considerable debate in Nigeria.
While some argue that it promotes a more competitive market, others express concern about the impact on consumers, especially in the context of economic challenges and inflation.
The current fuel scarcity has further fueled discussions about the effectiveness of deregulation and the role of NNPC Ltd. in managing the sector.
As Nigerians face higher fuel prices and supply issues, there is a growing call for greater transparency and accountability in the petroleum industry.
