Story Summary:
- Human rights lawyer, Femi Falana, SAN, has criticised the Nigerian National Petroleum Company Limited (NNPCL) for setting the price of petrol produced by the Dangote Refinery, stating that it violates Section 205 of the Petroleum Industry Act (PIA), which mandates market-driven pricing.
- Falana argued that NNPCL’s justification for the high price, based on foreign exchange shortages, is not applicable to locally produced fuel and that petrol from the Dangote Refinery should not include costs typically associated with imported fuel.
- The Independent Petroleum Marketers Association of Nigeria (IPMAN) also expressed concerns, stating that it is unreasonable for petrol from the Dangote Refinery to be priced higher than imported alternatives.
Renowned human rights lawyer, Femi Falana, SAN, has condemned the Nigerian National Petroleum Company Limited (NNPCL) for setting the price of Premium Motor Spirit (PMS), commonly known as petrol, produced by the Dangote Refinery, following the deregulation of the petroleum sector.
In a statement released on Tuesday, Falana asserted that the NNPCL’s actions were in direct violation of Section 205 of the Petroleum Industry Act (PIA), which mandates that petrol prices be determined by market forces.
Falana referenced a recent statement by the NNPCL, which attributed fluctuations in petrol prices to foreign exchange shortages. “On September 5, 2024, NNPCL stated that forex illiquidity was a major factor driving the fluctuation in PMS prices, as dictated by the unrestrained market forces outlined in the PIA,” he said.
However, Falana criticised the NNPCL for deviating from this stance by setting a fixed price for PMS from the Dangote Refinery. “Contrary to the widely publicised statement, NNPCL has fixed the price of PMS produced by the Dangote Refinery and Petrochemical Company. This action is a clear violation of Section 205 of the PIA, which stipulates that the price of petroleum products should be determined by free market forces,” Falana argued.
He further contended that the petrol produced at the Dangote Refinery, located in the Lekki Free Trade Zone, should not be subject to costs typically associated with imported products. “Since the petrol from Dangote is locally produced, NNPCL cannot justify selling it at N950 per litre without factoring in costs like freight, lightering, jetty depot fees, storage fees, foreign exchange, and other charges typically applicable to imported fuel,” he added.
Falana’s remarks come in the wake of NNPCL’s announcement that it had commenced lifting PMS from the Dangote Refinery. Following this, the company revealed that the product would retail for N950 per litre in Lagos and surrounding areas, with prices exceeding N1,000 per litre in states such as Borno.
In response to the pricing, the Independent Petroleum Marketers Association of Nigeria (IPMAN) on Monday criticised NNPCL, arguing that locally produced fuel from the Dangote Refinery should not be more expensive than imported alternatives.
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