Global Markets Determine Petroleum Prices: NNPC Ltd Denies Undermining Dangote Refinery

Nigerian National Petroleum Company Limited (NNPC Ltd) has refuted allegations that it is undermining the Dangote Refinery, stating that the pricing of petroleum products is determined by global market forces. This comes after the Muslim Rights Concern (MURIC) accused NNPC Ltd of becoming the sole offtaker of products from the refinery and allegedly strangling its operations.

According to MURIC’s Executive Director, Professor Ish­aq Akintola, the organization has called on the Nigerian government to give the Dangote Refinery a free hand to operate and protect it from strangulation. MURIC also expressed concern that the recent changes to the pump price of Premium Motor Spirit (PMS) will prevent the Dangote Refinery from offering lower prices.

However, NNPC Ltd Chief Corporate Communications Officer, Olufemi Soneye, clarified that the market is open for lower prices from any domestic refinery. In a statement, Soneye emphasized that there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the Dangote Refinery Ltd. (DRL).

According to NNPC Ltd, the pricing of petroleum products is determined by global market forces, and the recent changes in PMS prices have no impact on the Dangote Refinery’s access to the Nigerian market. The company added that it will only fully offtake PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria.

Moreover, NNPC Ltd emphasized that domestic refineries 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. The company reiterated that it cannot undermine a business in which it holds a billion-dollar stake, adding that MURIC should have verified the facts before making statements that could potentially incite ordinary Nigerians against the organization.

NNPC Ltd’s statement provides a clear explanation of the situation, highlighting the crucial role of global market forces in determining petroleum prices and dispelling concerns about undermining the Dangote Refinery. As the country’s energy landscape continues to evolve, it is essential for stakeholders to remain transparent and provide accurate information to maintain public trust.