Senior Advocate of Nigeria and Human Rights Activist, Femi Falana, has stated that it is “illegal” for the Nigerian National Petroleum Company Limited (NNPCL) to set the price of Premium Motor Spirit (petrol) following deregulation.
In a statement issued on Tuesday, Falana argued that NNPCL’s actions violate Section 205 of the Petroleum Industry Act (PIA).
He said, “On September 5, 2024, the Nigerian National Petroleum Corporation Limited (NNPCL) stated that foreign exchange (forex) illiquidity had been a significant factor influencing the fluctuation in prices of Premium Motor Spirit (PMS) governed by unrestrained market forces, as provided for in the Petroleum Industry Act (PIA).
“The NNPCL was explaining the pump price of PMS imported into the country at the material time. Specifically, the Executive Vice President of Downstream NNPC Ltd Mr. Adedapo Segun, explained that Section 205 of the PIA, which established NNPC Ltd, stipulated that petroleum prices were determined by 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.”
‘But contrary to the well-publicised statement, the NNPCL has fixed the price of PMS produced by the Dangote Refinery and Petrochemical Company Limited. The action of the NNPCL is a violent contravention of section 205 of the PIA, which stipulates that the prices of petroleum products shall be determined by market forces.
“Furthermore, since the petrol sold by Dangote is not imported into the country but produced at the Lekki Economic Free Trade Zone, the NNPCL can not justify the sale of petrol at N950 per litre without freight cost, lightering cost, jetty depot fees, storage fees, foreign exchange costs, NPA charges: NIMASA charges, Customs duties etc. In fact, by selling the petrol produced by Dangote Refinery at a higher price, the NNPCL has confirmed its resolve to continue to sabotage the national economy through the reckless importation of cheaper petrol from foreign countries at a cost that the nation cannot afford.
“The NNPCL has justified the hike by saying that petrol is sold in dollars by the Dangote Refinery. Why should the NNPCL buy petrol in dollars since the Federal Executive Council (FEC) has directed that crude oil be sold to Dangote Refinery in Naira? Are the management staff of NNPCL and Dangote Refinery not aware that it is a criminal offence under section 20 of the Central Bank Act to refuse to accept the naira as a means of payment for any transaction in the country?
“Furthermore, the exclusive purchase of petrol from Dangote Refinery by the NNPCL is completely at variance with the letter and spirit of section 205 of the PIA. Therefore, other marketers should be at liberty to purchase petrol directly from Dangote Refinery and distribute to outlets in all the states of the Federation. Henceforth, the Federal Competition and Consumer Protection Commission should stop the NNPCL from exercising monopolistic control of the petrol produced by Dangote Refinery.”
Femi Falana’s criticism follows the commencement of Premium Motor Spirit (PMS) lifting by the Nigerian National Petroleum Company Limited (NNPCL) from the Dangote Refinery on Sunday.
Shortly after the lifting began, NNPCL announced that the product would be sold at ₦950 per litre in Lagos and surrounding areas, with prices exceeding ₦1,000 per litre in states like Borno.
Reacting to the price announcement, the Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed disapproval, stating that it was unreasonable for petrol lifted from the Dangote Refinery to be priced higher than imported products.
John Kekeocha, IPMAN’s National Welfare Officer, voiced this concern during an appearance on Channels Television’s The Morning Brief program on Monday.
“If NNPC can sell Dangote products higher than the imported products then it doesn’t make sense. What is the celebration we are having all these while then?” he queried.