Falana Faults NNPCL For Fixing Price Of Dangote Petrol

Femi Falana, a Senior Advocate of Nigeria (SAN) and Human Rights Activist, has asserted that it is unlawful for the Nigerian National Petroleum Company Limited (NNPCL) to set the prices of Premium Motor Spirit, commonly referred to as petrol, following the deregulation process.

In a statement issued on Tuesday, Falana indicated that the actions of NNPCL contravene Section 205 of the Petroleum Industry Act (PIA). He noted that on September 5, 2024, NNPCL acknowledged that the lack of foreign exchange liquidity was a major factor affecting the price fluctuations of Premium Motor Spirit (PMS), which should be governed by unrestricted market forces as outlined in the PIA.

The NNPCL provided clarification regarding the pump price of PMS imported into Nigeria at that time. Specifically, Mr. Adedapo Segun, the Executive Vice President of Downstream NNPC Ltd, pointed out that Section 205 of the PIA, which established NNPC Ltd, mandates that petroleum prices be determined by free market dynamics.

Falana stressed that the market has undergone deregulation, indicating that petrol prices are now influenced by market forces rather than being set by the government or NNPC Ltd. Furthermore, he highlighted the significant impact of the exchange rate on 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?

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“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,” Falana noted.

Falana’s remarks followed the initiation of PMS lifting by the NNPCL from the Dangote Refinery on Sunday. Upon the start of this process, NNPCL declared that the price of the product would be ₦950 per litre in Lagos State and surrounding areas, while exceeding ₦1000 per litre in regions like Borno.

In response to this situation, the Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed its discontent on Monday, criticizing NNPCL for pricing petrol sourced from the Dangote Refinery higher than that of imported fuel.

John Kekeocha, IPMAN’s National Welfare Officer, made these comments during an appearance on Channels Television’s The Morning Brief breakfast show.

“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.