-Pix above: Dangote and his refinery
The Nigerian National Petroleum Company Limited (NNPCL) yesterday clarified that the Dangote Refinery and any other domestic refinery are free to sell petroleum products directly to any marketer on a willing seller-willing buyer basis, which is the current practice for all fully deregulated products.
While further clarifying that there was no guarantee of lower prices with domestic refining compared to any global pricing framework, the state-owned oil firm further disclosed that it had no desire or intention to become the distributor for any entity in a free market environment, adding that the notion of becoming a sole off-taker did not arise.
Dangote Refinery had on Tuesday announced the commencement of production of petrol, positioning the NNPCL as its first sole buyer.
Vice President at Dangote Industries Limited (DIL), Devakumar Edwin, had stated during the week that the national oil company was prepared to purchase its products exclusively to meet local demand.
However, there had been concerns that the NNPCL’s interest in becoming the refinery’s sole buyer would be associated with potential risks that could undermine the principles of a free market and competition, further stifling the market and entrenching corruption.
But in a statement signed by the Chief Corporate Communications Officer of the NNPCL, Olufemi Soneye, the national oil company said that the insinuation that it would be the sole buyer of Dangote fuel ran contrary to its own position.
The statement debunked the position of Muslim Rights Concern (MURIC), which it said claimed that the Dangote Refinery was being undermined by the actions of the NNPCL.
“To set the records straight, NNPCL 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 Premium Motor Spirit (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,” the statement explained.
NNPC added that it would only fully offtake petrol from the Dangote Refinery if the market prices of the product 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.
“NNPC Ltd has no desire or intention to become the distributor for any entity in a free market environment, and therefore, the notion of becoming a sole off-taker does not arise,” the oil company added.
The $20 billion refinery officially unveiled its refined petrol on Tuesday with Dangote announcing that the product would be in filling stations in 48 hours from that time, pending discussions with the Nigerian authorities.
NNPC has however debunked the claim by MURIC that its actions were undermining the Dangote Refinery.
“Specifically, MURIC asserts that recent changes to the pump price of PMS will prevent the Dangote Refinery from offering lower prices and that NNPC Ltd has become the sole off-taker of all products from the refinery.
“Furthermore, 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 offtake PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria.
“The NNPC Ltd cannot undermine a business in which it holds a billion-dollar stake. As an advocacy group for fair and just treatment, MURIC should have verified the facts before making statements that are entirely flawed and have the potential to incite ordinary Nigerians against the NNPC,” the statement stressed.(agency)///
