The Nigerian National Petroleum Company Limited (NNPCL) on Thursday said it would lift Premium Motor Spirit, popular known as petrol from Dangote Petroleum Refinery on September 15 but outlined factors that would determine its price.
It said foreign exchange rates and market forces would influence the cost of petrol, stressing that the market had been deregulated.
This came as oil marketers declared on Thursday that about 2,000 tankers were still awaiting to load the product at various depots of the national oil company in Lagos, Warri and Port Harcourt.
Also, the Federal Government declared that there was going to be a massive supply of petrol at the weekend as vessels had started offloading, but ruled out PMS price fixing.
Operators stated that the government might have put an end to petrol subsidy going by its latest position on the pricing of PMS.
NNPC said foreign exchange illiquidity had been a significant factor influencing the fluctuation in prices of petrol, which are governed by unrestricted free market forces, as provided for in the Petroleum Industry Act.
The Executive Vice President of Downstream, NNPC, Adedapo Segun, said on Thursday during a live television programme that the current fuel scarcity was expected to “subside in a few days as more stations recalibrate and begin selling PMS.”
He said Section 205 of the PIA, which established NNPC, stipulated that petroleum prices were determined by unrestricted free market forces.
“The market has been deregulated, meaning 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,” Segun added.
On the commencement of lifting PMS from the Dangote refinery, Segun said NNPC was awaiting the September 15 timeline provided by the refinery, adding that the national oil firm had nearly a thousand filling stations nationwide and was collaborating with marketers to “ensure that stations open early, close late, in order to maintain adequate fuel supply to meet the needs of Nigerians.”
“We are also engaging relevant authorities to ensure product diversions are prevented and timely deliveries to all stations are ensured. The scarcity should ease in the next few days as more stations recalibrate and begin operations,” he stated.
NNPC also said it had supplied 30 million barrels of crude oil to the Dangote refinery so far, planning an additional 17 million barrels soon.
Segun, who said this was part of the Federal Government’s decision to sell crude to local refineries, disclosed this Thursday while speaking on Arise Television.
According to him, the company will supply 6.3 million barrels in September and 11.3 million barrels in October.
“We have supplied about 30 million barrels to Dangote so far, 6.3 million this month, and we will supply 11.3 million in October,” he stated.
Segun noted that the 6.3 million barrels would be delivered in seven cargoes but expressed concern that the current pump price of petrol did not reflect market realities.
“The pump price today is not market reflective. NNPCL is the sole importer of PMS in the country, which is abnormal. We should be coming to a situation where the free market determines prices,” he said, stressing that market forces should drive fuel prices, rather than any single entity.
He clarified that NNPC’s role as the sole importer of petrol was not a deliberate decision by the company but a response to market conditions.
“Let me put it in proper perspective, NNPC is not a regulator. We didn’t put ourselves in the position of sole importer. We don’t determine who plays in the market. We decided to come in when others reduced their participation. It is not about us wanting to be monopolists,” Segun stated.
He explained that achieving a stable fuel supply and price would require perfect market conditions, including a more liquid foreign exchange market.
“Market conditions need to be perfect, and there needs to be FX liquidity,” he added, hinting that broader economic reforms might be needed to resolve the fuel pricing dilemma.
It was learnt that NNPC had been working closely with private refineries, such as Dangote, to ensure a steady supply of crude oil for processing.
“Once Dangote refinery begins the rollout of PMS and we at NNPC commence lifting, we will communicate the details,” NNPC spokesman, Olufemi Soneye, stated.
