The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has clarified that the Nigerian National Petroleum Company Limited (NNPCL) has not overstepped its bounds in determining petrol prices. According to NMDPRA’s CEO, Engr. Farouk Ahmed, “market forces dictate petrol prices, as stipulated in the Petroleum Industry Act (PIA) 2021.”
The controversy surrounds NNPCL’s pricing template, which sets the average petrol price at N950.22 in Lagos and N1,019.22 in Borno. Critics argue that this undermines NMDPRA’s regulatory authority. However, Ahmed emphasised that NMDPRA’s role is to “ensure fair competition and prevent market exploitation,” now that the government no longer fixes petrol prices following the dissolution of the Petroleum Products Pricing Regulatory Agency (PPPRA).
NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, explained that the pricing template “reflects negotiated terms with Dangote Refinery, considering international petrol prices and foreign exchange rates.”
Industry experts suggest that NMDPRA should provide benchmark prices to prevent profiteering and ensure fair competition, citing examples from Australia, South Africa, and the UK. They argue that NNPCL’s sole off-taker status “creates market imbalances.”
The Executive Vice President, Downstream, NNPCL, Mr. Dapo Olusegun, clarified that “NNPC is not a regulator and cannot fix prices.” He emphasised that “market forces determine prices, which are indexed to Brent crude oil prices.”
As Nigeria navigates its deregulated petroleum market, stakeholders urge transparency and fairness to protect consumers. The Independent Petroleum Marketers Association of Nigeria (IPMAN) awaits official notification on Dangote petrol pricing, seeking clarity on the pricing framework.
In the midst of this controversy, a credible source close to NNPCL hinted that October’s price template may bring petrol prices down, considering the reduced crude oil price and the federal government’s agreement to sell crude to Dangote Refinery in naira.
Sources:
- Central Bank of Nigeria’s Economic Report for Q1 2024
- Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA)
- Nigerian National Petroleum Company Limited (NNPCL)
