Despite the recent increase in the price of petrol to over N885 per litre from N598, the Nigerian National Petroleum Company Limited (NNPC Ltd), on Thursday, hinted that the current pump price is still not reflective of true market conditions.
The revelation suggests that Nigerians may not yet have experienced the final rise in fuel prices as the country gradually moves toward a fully deregulated petroleum market.
The Executive Vice President of NNPC Ltd’s Downstream Division, Mr. Adedapo Segun, made the disclosure during a live interview on Arise Television. According to Segun, while the N885 per litre price tag has come as a shock to Nigerians, it still falls short of the full market price for petrol.
The sudden hike sent ripples across the country, triggering soaring transportation and food costs and placing immense financial pressure on households. Market players have also taken advantage of the situation, with some independent marketers selling petrol at N1,000 per litre and above.
On the black market, prices have surged even higher, ranging between N1,200 and N1,500 per litre, depending on the region.
Despite these challenges, Segun stressed the importance of transitioning to a market-driven pricing model where all players, not just NNPC Ltd, are involved in the importation of petroleum products. He noted that the current situation, in which NNPC Ltd is the sole importer of petrol, is unsustainable in the long term.
Segun emphasised that while the government has intervened to provide some relief to the public, the ultimate solution lies in creating a free market where competition and market forces drive the prices.
“We want to move toward a situation where the market determines the price, but this requires broader reforms and the right market conditions,” he explained.
In a bid to ensure the smooth operation of the Dangote Refinery and support Nigeria’s push toward local refining, Segun revealed that NNPC Ltd is set to deliver an additional 17.8 million barrels of crude oil to the refinery in two phases. This will complement the 30 million barrels previously supplied to kick-start operations at the Dangote facility.
According to Segun, the first tranche of 6.8 million barrels will be delivered in seven cargoes by September, while another 11 million barrels are slated for delivery in November. The partnership between NNPC Ltd and Dangote Refinery is crucial to reducing Nigeria’s dependency on imported refined products and stabilising the local supply of petrol.
Contrary to widespread speculation, Segun dismissed claims that NNPC Ltd would act as the sole off-taker of petrol and other products from the Dangote Refinery. He clarified that once market conditions are favourable for other players to participate, the sale of Dangote products would be extended to them.
“For now, NNPC Ltd will act in the public interest as the provider of last resort, as stipulated by the Petroleum Industry Act (PIA),” Segun said.
He explained that while the current situation demands NNPC’s involvement, the long-term goal is to foster a competitive market where various players can engage in refining and product distribution.
Segun also addressed the issue of NNPC Ltd’s outstanding $6.8 billion debt to international fuel suppliers. He attributed the debt to Nigeria’s ongoing foreign exchange liquidity challenges, which have made it difficult to settle payments in a timely manner. Despite these hurdles, Segun reassured Nigerians that NNPC Ltd maintains strong relationships with its suppliers and has not defaulted on any payments.
Meanwhile, the Dangote Group has denied media reports that the Nigeria National Petroleum Company Limited (NNPC Ltd) is currently sourcing petrol from its refinery and selling it at N897 per litre.
In a statement issued by its Group Chief Branding and Communications Officer, Anthony Chiejina, the Dangote group clarified that discussions regarding petrol pricing have not yet occurred, as it has not finalised any agreements with the national oil company.
Chiejina assured Nigerians that high-quality petroleum products from Dangote will be made available nationwide and urged the public to disregard the claims published in a section of the media, stressing that the information is false.
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