Oil marketers may begin the importation of Premium Motor Spirit, popularly called petrol, following the recent declaration by the Nigerian National Petroleum Company Limited that it would only fully offtake the product from the Dangote Petroleum Refinery if the market prices of the commodity were higher than the pump prices in Nigeria.

NNPC also declared that Dangote and other domestic refineries were free to sell directly to any marketer on a willing buyer, willing seller basis, adding that it had no desire or intention to become the distributor for any entity in a free market environment.

This is, however, contrary to what the President of Dangote Group, Alhaji Aliko Dangote, stated last week. The owner of the $20bn refinery had stated that the refinery was waiting for NNPC, adding that the national oil company would be the only off-taker of its petrol domestically.

Reacting to the slowdown in discussions between Dangote and NNPC, oil marketers stated that they would only source the product from wherever they found it cheaper, as this could be through importation.

Commenting on the price of Dangote petrol, the National Operations Controller, Independent Petroleum Marketers Association of Nigeria, Mustapha Zarma, said, “We have not contacted Dangote for now, but we may contact the refinery’s sales department this week to find out the price.

“If the price is competitive enough for one to buy and get his return on investment and the required margin, then we wouldn’t mind purchasing directly from him to complement what NNPC is bringing in or what NNPC would buy from Dangote.”

Zarma confirmed that since the Federal Government and NNPC had said the Dangote refinery would sell its product at the market price, this implied that the government would not intervene in the pricing of the commodity from the plant through subsidy.

Based on this, he noted that other dealers now had the opportunity to source the product from any producer at a cheaper price, whether locally or internationally.

He noted that some oil marketers currently imported diesel, while others bought the product from Dangote, adding that a similar situation would play out in the purchase of petrol, going by NNPC’s recent position on Dangote petrol.

“I believe that we are going to analyse the price of Dangote petrol and see the advantages of buying from Dangote viz-a-viz importation. Whichever we feel is cheaper will automatically attract everybody, especially if importation is cheaper.

“That will bring about competition and I don’t think the government will allow price monopoly. They would want a competitive market where the laws of demand and supply would determine the local price of refined petroleum products, just like diesel is right now.

“And with that, there is going to be some kind of equilibrium in the pricing and there is going to be guaranteed sustainability of supply,” the IPMAN official stated.

Industry observers say the Federal Government seems not ready to stop fuel importation following the refusal of NNPC to be the off-taker of Dangote’s petrol.

They, however, noted that with the recent hike in the pump prices of petrol, the government was systematically stopping subsidies on the commodity, following the recent revelation by NNPC that it spent over N7.8tn subsidising petrol.

At the presentation of the audited report and accounts of NNPC for the 2023 business year in Abuja last month, NNPC’s Chief Financial Officer, Umar Ajiya, admitted that the oil firm was shouldering a heavy subsidy burden on petrol imports.

He said the government directed NNPC to sell the petrol it imported at a price that is half the landing price. According to him, at times the Federal Government paid the money and it could as well net off for it.

While the official pump price of petrol is about N600/litre, the average landing cost is about N1,200/litre. Ajiya said the company covered about N7.8tn in “shortfall” in the first seven months of this year.

“What has been happening is that we have been importing PMS, landing at a certain price, and the government is telling us to sell it at half price. So, that gap between that landed price and the half price is what we call shortfall or we call it a subsidy,” the CFO had stated.

Foreign producers

Also speaking on the development, the National Publicity Secretary of IPMAN, Ukadike Chinedu, said though marketers were ready to buy from Dangote, the revelation from NNPC showed that dealers were free to source their products from any cheaper source.

“From what is happening now, it means that the Petroleum Industry Act is being implemented, the removal of subsidies has come to stay and the price of petrol is to be determined by the economics of demand and supply.

“Now that NNPC has said they are not the sole off-taker of Dangote petrol, it then means that the price of the product would determine where we are going to buy it. If NNPC imports the product and its price is cheaper than that of Dangote, we will buy from NNPC. If Dangote’s price is cheaper than that of NNPC, then we will buy from Dangote. So, right now, competition will set in. Remember that diesel price rose as high as N1,600/litre and Dangote came in with his own at N1,200/litre, and the importers reduced their price to N1,100/litre.

“It further dropped to about N950 and now revolves between N950 and N1,100 for both the imported ones and the ones produced locally. By the time competition sets in, the product will sell cheaper,” Ukadike stated.

On whether marketers had started making plans to import if the imported product would be cheaper, he replied, “Our National President, Alhaji Abubakar Maigandi, has commenced discussions with some investors who are now in the process of securing funds going by the current trend in the business.

“So, we are talking with some foreign partners because you need to understand that independent marketers are the highest buyers of diesel from Dangote refinery because we control about 80 per cent of the filling stations nationwide. So, if Dangote PMS is cheaper we will buy it, but if importation is cheaper, we will go for it.”

President Bola Tinubu recently directed that NNPC should sell crude to Dangote and other domestic refineries in naira.

The President’s Special Adviser on Revenue, Zacch Adedeji, who also serves as Chairman, Federal Inland Revenue Service, explained that the move would mitigate Nigeria’s heavy reliance on foreign exchange for crude oil imports, accounting for roughly 30 to 40 per cent of its forex expenditure.

The revenue chief said that by denominating crude oil transactions in naira, the government expected to significantly lighten its forex burden, with estimated annual savings of $7.3bn. It is also expected to reduce monthly forex expenditure on petroleum products to $50m from approximately $660m.

“Monthly, we spend roughly $660m in these exercises, and if you analyse that, that will give us $7.92bn savings annually,” he stated.

Earlier, the President stated that Nigeria spent N2tn monthly on fuel importation.

The PUNCH reports that while licensed individuals have been importing diesel into Nigeria, NNPC remains the sole importer of petrol under the current administration.

Despite being the largest oil producer in Africa, Nigeria depends on imported petroleum products due to low refining capacity.

In May, Dangote said Nigeria would no longer import fuel the moment his refinery commenced production of petrol.

But unless there is an intervention from the President, Dangote’s plan to end fuel importation may not be achieved anytime soon, even as the $20bn refinery unveiled its PMS last week.

The NNPC, in a statement by its spokesman, Olufemi Soneye, said on Saturday that it would not buy Dangote PMS unless it was cheaper than that of the international market.

This is contrary to claims by Dangote that the refinery was waiting for the NNPC to roll out its product.

On Saturday, NNPC stated that it would only fully offtake petrol from the Dangote refinery if the market prices of PMS were higher than the pump prices in Nigeria.

The NNPC also declared that Dangote and any other domestic refineries are free to sell directly to any marketer on a willing buyer, willing seller basis, saying it had no desire or intention to become the distributor for any entity in a free market environment.

“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,” Soneye stated.

Soneye added that Dangote refinery could lower its price if it felt the new prices were too high.

“We emphasise 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 off-take PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria,” the NNPC said.

This statement from the NNPC could be an indication that the NNPC was not ready to stop importation, especially as its refineries ere yet to become operational.

Since the unveiling of its PMS, the NNPC appeared to have turned its back against the Dangote refinery.

While unveiling the 650,000-capacity refinery, Dangote stated that the facility would roll out petrol whenever NNPC was ready.

Dangote disclosed that the petrol would get to the filling stations in the next 48 hours (from Tuesday) after all arrangements with NNPC were concluded, saying the queues would be over soon.

He emphasised that the NNPC would sell and distribute the product, under the current naira crude sale arrangement.

“Once the NNPC is ready, we roll,” Dangote said.

But it seems that talks between the two companies have collapsed and this means fuel importation might continue.

In the past few days, the NNPC has in different statements denied that it would fix the price for Dangote or be its sole distributor.

This was after the state-owned energy firm said it was given a September 15 timeline by the refinery to lift its petrol

‘NNPC evading responsibilities’

A reliable source close to Dangote refinery expressed concerns over the turn of events.

The source, who spoke on condition of anonymity because she was not authorised to speak on the matter, said NNPC had been the one fixing petrol prices over the years, wondering why it was trying to relinquish that duty now.

The source also denied that Dangote refinery gave NNPC a September 15 deadline to lift its fuel.

She added that those making money from fuel importation were the forces trying to stop the sale of Dangote PMS locally.

“Dangote is not a regulator, those in NNPC are just trying to be clever, they want to shift the blame to somebody else. This is something they have been doing for many years.

“Some people are embittered, this is what they have been doing over the years, embezzling money,” our source said.

On pricing, she added, “I don’t know if there is any price for now. We all know what is going on. These is propaganda from these NNPC people. They know what they have done and they want to cover up. Very soon, everybody will know the actual quantity of fuel we consume in this country.”

IPMAN awaits loading

IPMAN president Abubakar Maigandi told one of our correspondents that the independent marketers were waiting for PMS from NNPC Retail.

“We are still collaborating with NNPC. I’ve called their officials and my marketers are supposed to have started loading. They said they would start loading them. So, we are still waiting.

“According to the information from the NNPC, we learnt that there is enough supply. So, we are waiting for them if they truly have enough supply because we already paid,” Maigandi stated.

The Nigerian National Petroleum Company Limited, NNPC Ltd, has denied claims that it is undermining the Dangote Refinery, insisting that the market is open for lower prices from any domestic refinery.

This comes after the Muslim Rights Concern (MURIC) alleged that the recent changes to the pump price of Premium Motor Spirit (PMS) will prevent the Dangote Refinery from offering lower prices.

In a statement by the Executive Director of the group, Professor Ish­aq Akintola, MURIC urged the Nigerian government to give the refinery a free hand to operate and protect it from strangulation.

MURIC also accused NNPCL of becoming the sole offtaker of all products from the refinery.

However, in a statement by Olufemi Soneye, Chief Corporate Communications Officer, NNPCL said the pricing of petroleum products from any refinery, including the Dangote Refinery, is determined by global market forces.

NNPCL said it cannot undermine a business in which it holds a billion-dollar stake, noting that MURIC should have verified the facts before making statements that has the potential to incite ordinary Nigerians against the organization.

“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.

“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.

“The NNPC Ltd. cannot undermine a business in which it holds a billion-dollar stake,” the statement partly read.

Oil marketers have yet to commence the loading of Premium Motor Spirit, popularly called petrol, despite assurances by the Federal Government that the commodity will be available this weekend.

Saturday PUNCH gathered that though some PMS vessels had arrived in the country at the NNPC’s Apapa and Port Harcourt depots, loading by independent marketers had yet to begin.

As a result, petrol queues in major cities persisted on Friday despite the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, earlier promising that the product would be massively available before the weekend.

But the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria, Mustapha Zarma, said on Friday that the loading of products at depots had yet to commence, stressing that the queues could last till Monday.

“Maybe the improvement in supply will start tomorrow or Sunday but as of yesterday (Thursday) and today (Friday), there has not been much loading of products. And even if there has been loading today, I don’t think it is much.

“That is why the queues are still visible. We cannot confirm the massive release of products as announced by the minister until maybe Monday,” Zarma stated.

On whether the petrol being expected was the one from the Dangote refinery, Zarma replied, “I am not in a position to answer that. It is NNPC that should answer that.”

NNPC earlier stated on Thursday that it would start lifting products from the Dangote refinery on September 15, 2024.

Zarma had told our correspondent on Thursday that about 2,000 petrol tankers were still at various NNPC depots waiting to lift products.

He said, “The queues in Abuja are heavy. Nobody is loading. Right now, most of the tickets of independent marketers, which had been paid for since the last three months have not been cleared to load.”

The President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, also confirmed that marketers had yet to start lifting petrol as required.

“We are aware of what the minister said, but we don’t have products yet. We have not started lifting the product as it is supposed to be and that is why the cost is very high in filling stations that have it.

“People struggle so much to get the product to sell to keep their businesses running. Once the products are readily accessible, the price will stabilise and the queues will clear. That is the situation.”

Presidential aide attacks Dangote

Meanwhile, a presidential aide said the Dangote Refinery was running away from pricing in order not to look bad to Nigerians.

The official, who spoke on condition of anonymity because of the sensitivity of the matter, noted that the refinery was the sole determinant of pricing, adding that it could not sell fuel below its cost price.

“The petrol price cannot be less than N1,000; that was why Dangote decided to push it to the government. So, if the price is determined by the Federal Government, people can attack the government. How does a private company ask the government to fix its price?” the official stated.

In a statement on Thursday, the Dangote Group Chief Branding and Communications Officer, Anthony Chiejina, had said the PMS market in Nigeria was strictly regulated and the refinery would wait for relevant government agencies for the price.

He said, “The PMS market is strictly regulated, which is known to all oil marketers and stakeholders in the sector, hence we cannot determine, fix, or influence the product price, which falls under the purview of relevant government authorities.”

However, the NNPC, in another statement by its spokesman, Olufemi Soneye, made a contrary claim about the price.

The company held that the PMS market had been deregulated and market forces would determine the price of the product.

Soneye was quoting the Executive Vice President of Downstream, NNPC, Adedapo Segun, saying Section 205 of the Petroleum Industry Act, which established NNPC Ltd, stipulated that petroleum prices were determined by unrestricted free market forces.

“Additionally, the exchange rate plays a significant role in influencing these prices,” the NNPC submitted.

Market forces

Experts told our correspondent that if the NNPC and the Federal Government allowed market forces to determine the price of Dangote petrol, it might be as high as N1,000 per litre.

“Can Nigerians buy petrol at N1,000 or N1,100?” a depot operator queried, asking the government to intervene to ensure affordable energy for Nigerians.

Speaking with our correspondent, an energy consultant and expert, Henry Adigun, said the cost of producing a litre of PMS is an average of N750, without any additional cost.

According to Adigun, this could rise to N800/litre when other margins are added, which will also increase when it gets to the filling stations.

He stated that the NNPC could decide to buy from Dangote and sell at a subsidised rate to the masses. The consultant, however, called for transparency in the entire process.

“Anybody that is expecting N400 or N500 petrol is just wasting his time. It won’t happen,” Adigun added.

Similarly, Professor Emeritus, Wumi Iledare, held that the PIA did not empower anyone to set the price of petrol, saying it should be determined by the forces of demand and supply.

Iledare stated that the Nigerian Midstream and Downstream Petroleum Regulatory Authority had the responsibility to ensure there was no price gouging.

The don advocated for a willing seller, willing buyer arrangement, saying the NMDPRA should not allow the NNPC to be the sole buyer of Dangote PMS.

He rejected the payment of shortfalls on PMS, nothing that the sale of petrol to all marketers in naira would crash the price.

Until the market becomes fully deregulated with many participants, Iledare suggested that Nigeria should practise what he called price modulation with a committee looking at important determinants of demand and supply to agree on a price to be reviewed as the situation changes.

OPS warns NNPC

The Organised Private Sector on Friday warned that allowing market forces to determine the prices of fuel would bring about more volatility in the sector.

In a statement made available to Saturday PUNCH, the National President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, Dele Oye, said the chamber condemned the recent announcement by the Minister of State for Petroleum, Heineken Lokpobiri, that the Federal Government would no longer interfere in the pricing of PMS in the country.

He said NACCIMA was particularly alarmed by the potential impact of this decision on businesses, consumers, and the overall economic landscape, adding that the deregulation of PMS prices, coupled with the influence of foreign exchange illiquidity, was likely to result in significant volatility and unpredictability in fuel prices.

“The possibility of a sharp increase in fuel prices, potentially exceeding the initial rise from N600 to N800 at NNPC stations is a grave concern. This will undoubtedly lead to a surge in inflationary pressures, eroding the purchasing power of consumers and putting immense strain on businesses already struggling to navigate the challenging economic environment.

“A more gradual and well-planned approach to PMS pricing is essential to ensure stability, predictability, and sustainable economic growth in Nigeria,” he stated.

In an interview with our correspondent, the President of the Manufacturers Association of Nigeria, Francis Meshioye, said the Federal Government should examine the underlying factors causing the price hikes before attempting to address the problem, noting the need to devise long-term solutions.

He said, “The effort to control fuel prices has been largely sabotaged, and the cost of goods has also increased. The government should take the time to examine the root of the issue. There are underlying factors causing these problems, and they cannot be addressed without tackling the fundamental issues that led to the price hikes. It’s time to stop with superficial solutions; what we need are quick and effective measures. They must identify what triggered the increases and devise a strategic plan to address the underlying problem. The key concern is that the government should focus on long-term solutions because energy supply is crucial to manufacturers.”

Meshioye added that the inconsistencies in the energy sector were adversely affecting the operational strategies employed by manufacturers, as they were constantly required to plan in alignment with the current economic realities in the country.

According to the MAN boss, the Federal Government should engage the services of patriotic experts and stakeholders in the energy sector, whose recommendations would be adopted for implementation after brainstorming on how to get lasting solutions to the problem.

Also, the Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said fuel scarcity results in profiteering, and the only way the government can stop it is to ensure the availability of the product and promote competition.

“Generally, three critical factors determine the prices of petroleum products: procurement costs, logistics costs, and product availability. The different prices we are currently witnessing are consequences of these factors. If the conditions around these variables improve, we would see a moderation in prices as well as less variability. It is product scarcity that results in profiteering. The way to tackle this exploitative practice is to ensure product availability and promote competition,” he stated.

TUC considers strike

The Trade Union Congress criticised the increase in fuel prices, saying it undermined the new minimum wage of N70,000.

The TUC revealed that it would convene to discuss potential strike action, noting that “with the current situation, anything can happen.”

In an interview with Saturday PUNCH, the National Deputy President of the TUC, Tommy Etim, expressed concerns that the hike would lead to higher costs for goods and services.

He stated, “Our focus right now isn’t just on whether we are considering a strike. Given the current circumstances, anything is possible. It may not even originate from us. For instance, the #EndBadGovernance protest wasn’t initiated by us, it was a response to pressing economic issues.”

Etim emphasised that any decision regarding a strike would depend on the positions taken by individual labour centres.

“Once the various labour unions have made their decisions, we will formulate a unified stance for organised labour,” he added.

But the Nigeria Labour Congress reiterated that it would meet to give direction on how to engage the Federal Government on the fuel hike.

Spokesperson for the NLC, Benson Upah, said the appropriate organs of the body would meet and take decisions.

Nigerians trek, ride bicycles

Following the hike in fuel prices, which has increased the cost of transportation across the country, some Nigerians have resorted to the use of bicycles for interstate movement.

Our correspondents, who travelled to major cities in the country on Friday, reported that some Nigerians opted for trekking and cycling.

Some residents of Ogun State said they had abandoned their cars in favour of public transport, coupled with trekking, to cope with the unbearable hardship caused by the fuel crisis.

A senior health worker in the state, Mrs Fauziyah Adesola, said she had dropped her car and cut down on unnecessary journeys.

“With the fuel subsidy removal and the price rising from N200 to N600 per litre, I initially tried to stubbornly use my personal car, but I found out that it was a battle I couldn’t win. I was burning so much on fuel, children’s school bills were skyrocketing, and the cost of food and many other things were rising, yet the salary remained unchanged.

“So, I switched to using public transport when going to my workstation outside Abeokuta, and I added a bit of trekking. I have since found peace. I have also cut down on unnecessary journeys and social engagements,” she lamented.

Another resident, Mr Kola Adio, said he had also parked his car and embraced public transport and trekking to manage the burdensome cost of transportation.

He said, “I stopped taking my car to work in January, and I have noticed that many people in my neighborhood have done the same. I now use public transport to work, which costs me an average of N2000, compared to the N10,000 I was spending daily.”

A man, David Michael, said he now uses commercial motorcycles, popularly called okada, to get to work.

He said, “Is it not better to spend N1,200 on a bike to work daily than about N5,000 or even more driving myself? It is common sense. What I do now is just to take my car to church when the whole family is involved.

“I have also learnt to trek for at least 10 minutes from my house to the junction to get a bike to my work station. Many people are doing the same because this economy is harsh. It is terrible. None of us prepared for this situation, but God will see us through.”

In some parts of Delta State, a similar trend is observed as some Nigerians in Asaba trekked to work, while others used bicycles for movement within the state capital on Friday.

A resident in the city, Mr Monday Iwu, said he resorted to using a bicycle because he could not afford to buy fuel at the exorbitant price.

“I have a car, but since the fuel hike, I have parked my car and have been using a bicycle to work. However, our problem is the road. There are no proper roads, and cars, trucks, and even tricycles don’t allow us on the road; they harass us with their big vehicles. That’s our only fear, but we have no other options.”

Speaking with our correspondent, a young woman residing in the Ekeki axis of Yenagoa, Bayelsa State, Tarindo Mike, said she had reduced her movements due to the increase in transportation fares caused by the fuel price hike.

He said, “I’m just managing. Like today, where I used to pay N100, they now charge N150. I waited for two or three Keke before the last one carried me, and the rider said, ‘You know that fuel is high, and I’m just carrying you for N100.

“The situation is depressing. As a seller, I sample the prices of intend to buy the next day, but when I go with the money, I’m told the price has increased, and it makes me sad.”

In Ibadan, the Oyo State capital, a middle-aged woman” who identified herself only as Funke, said she trekked from Ring Road to the Challenge area of the city on Friday because she could not afford the high fares that motorists demanded due to the fuel price hike.

Similarly, a resident in the Odo-Ona Elewe area of Ibadan, who simply gave his name as Mr Luku, said, “Most of the people living in this community often trek long distances to major roads where they can then board Keke Maruwa (tricycle) or Micra taxi cabs when they have business in other areas of Ibadan.

“This is how we have been trying to cope with the fuel situation since Tinubu removed the subsidy on petrol. Many people in this community don’t go out except for important reasons.”

Also, a commuter in Abia state, said, “We have decided to trek so that instead of paying N400, we can now pay N300. Honestly, this fuel hike is changing the attitude of residents of the state. We now engage in trekking to cushion the effect of the hike.”

When our correspondent spoke to a bicyclist, he said, “I decided to fix my abandoned bicycle so I wouldn’t need to pay N400 from Douglas Road to Orji. Did you notice that passengers have resorted to trekking? There’s always a way out.”

The Nigerian National Petroleum Company Limited (NNPCL) has said Premium Motor Spirit or petrol from the Dangote Refinery will begin to flood the market from September 15, 2024.

The company who revealed this in a statement signed by its Chief Corporate Communications Officer, Olufemi Soneye on Thursday in Abuja, said prices of products would be determined by market forces.

The development follows the commencement of petrol refining by the Dangote Refinery earlier in the week.

Quoting NNPCL’s Executive Vice President of Downstream, NNPC Ltd, Adedapo Segun, Soneye said the downstream sector had been fully deregulated, and the company would no longer fix prices.

His argument puts to rest speculations that NNPCL would continue to fix prices despite announcement that the downstream sector had been deregulated.

The speculation was also fueled by reports that NNPCL would be the sole lifter of petrol from the Dangote refinery.

“The Nigerian National Petroleum Company Limited (NNPC Ltd) has stated that foreign exchange (forex) illiquidity has been a significant factor influencing the fluctuation in prices of Premium Motor Spirit (PMS), which are governed by unrestricted free market forces, as provided for in the Petroleum Industry Act (PIA),” the statement said in part.

While quoting Segun, NNPCL explained 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 Ltd, stipulated that petroleum prices were determined by unrestricted free market forces.

According to him, “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.”

On the commencement of lifting PMS from the Dangote Refinery, Segun said that NNPC Ltd was awaiting the September 15th timeline provided by the refinery.

Segun, who said no right-thinking individual would be comfortable with the current fuel scarcity, added that the NNPC Ltd had nearly a thousand filling stations nationwide and was collaborating with marketers to “ensure that stations open early, close late, to maintain adequate fuel supply to meet the needs of Nigerians.”

He assured 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.”

Segun’s clarification comes after 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.

NNPCL Supplies 30 Million Barrels To Dangote
NNPCL also said it had supplied 30 million barrels of crude oil to the Dangote refinery so far, planning an additional 17 million barrels soon.

The company said it 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.

It 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.

On NNPCL’s role as the sole importer of petrol, Segun said it 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.

However, a Presidency source, who spoke on condition of anonymity because he was not authorized to speak on the matter, told The PUNCH that Dangote and not the NNPC would determine the price of the product, insisting that the refinery would not sell below the cost price.

“It’s a private business, Dangote will determine the price of the product based on market realities,” our source said.

“The Federal Government has already intervened by asking NNPC to sell crude to Dangote in naira. So far, 30 million barrels of crude oil have been supplied to Dangote. Between now and October, Dangote’s refinery will receive 17.8 million barrels of crude from the Federal Government, in addition to the 30 million barrels already supplied.

“The Federal Government stated that going forward crude should be sold to Dangote in naira to alleviate the pressure of seeking foreign exchange. This also allows him to sell to marketers in naira. How else can the Federal Government intervene?

“Dangote claims that the Federal Government will determine his price, he is being economical with the truth. He certainly will not sell below his cost price.

“The only role of the government as a regulator is to ensure that businessmen like Dangote do not take undue advantage of Nigerians. The government will also ensure product quality and prevent Dangote from setting arbitrary prices. By implication, the government will not allow him to set arbitrary prices.”

The Nigerian National Petroleum Company (NNPC) Limited says the new price of premium motor spirit, also known as petrol, does not reflect market realities.

Adedapo Segun, executive vice-president, downstream, NNPC, spoke during the ‘Morning Show’ programme on Arise Television on Thursday.

On Tuesday, NNPC increased the price of petrol at its retail station.

In Lagos, the petrol price at NNPC retail stations is N855 per litre, while in Abuja, the product is sold for N897.

With the petrol price still below the landing cost of N1,200, Segun said Nigeria should move towards market-reflective prices to promote competition.

“What I can tell you simply is that the pump price today is still not market reflecting. And so, if we are, and we should be moving towards market reflective pump prices, so the competition can kick in,” Segun said.

“NNPC is the sole provider of PMS in the country today and that is abnormal, we should have a situation where everyone who is in the business is able to bring in PMS and sell. And the consumers get the best situation.”

Also, he said NNPC is working to ensure there is no diversion of petrol.

“We are doing our best to ensure that there are no diversions. When you have a price change situation, typically it takes a few days for all of the stations to recalibrate their meters. So that’s basically the situation we are in now,” he said.

“I expect that this will fizzle out within the next few days as more stations calibrate and begin to sell.”

‘OUR SUPPLIERS HAVE CONFIDENCE IN OUR ABILITY TO PAY DEBT’

Commenting on the debt owed to suppliers, Segun said the debt has not affected the relationship between NNPC and the suppliers.

He assured that the debt would be settled in due time.

“I can assure you that we have a good relationship with our suppliers. And as we speak, we don’t have a problem with the supplies coming in,” he said.

“Yes, we do have a challenge with payments. And that’s largely due to the fact that there are some effects of liquidity, as it’s obvious. And that is the challenge as much as we can, we are making payments to them.

“And talking about the debts, I wouldn’t want to go into that issue. But yes, there is a debt. There may have been a denial of the exact amount that was posted in the media. It wasn’t a correct amount, so maybe that was a denial. But yes, there is a debt.

“It’s not news to anyone. But we are doing all we can to make sure that we retain the confidence of our suppliers. And I can assure you that our suppliers have confidence in our ability to pay.”

Segun said NNPC has never defaulted in making its payments, which is why the suppliers continue to back the company.

The Nigerian National Petroleum Company Limited has announced that it has supplied 30 million barrels of crude oil to the Dangote oil refinery, with plans to provide an additional 17 million barrels soon.

The Executive Vice President of NNPCL Downstream, Adedapo Segun, disclosed this on Thursday while speaking on Arise Television.

According to Segun, the company will supply 6.3 million barrels in September and an additional 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,” Segun stated.

He added that this is part of the Federal Government’s decision to sell crude to local refineries.

Segun noted that the 6.3 million barrels will be delivered in seven cargoes.

He expressed concern that the current pump price does not reflect market realities.

“The pump price today is not reflective of the market. NNPCL is the sole importer of Premium Motor Spirit (PMS) in the country, which is abnormal. We should be moving towards 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 but rather a response to market conditions.

“Let me put it into proper perspective. NNPC is not a regulator. We didn’t choose to be the sole importer. We don’t determine who participates in the market. We stepped in when others reduced their participation. It is not about us wanting to be monopolists,” Segun stated.

He further explained that achieving a stable fuel supply and price would require ideal market conditions, including a more liquid foreign exchange market.

“Market conditions need to be ideal, and there needs to be FX liquidity,” he added, suggesting that broader economic reforms may be needed to address the fuel pricing issue.

NNPC has been working closely with private refineries, such as Dangote, to ensure a steady supply of crude oil for processing.