Senior Advocate of Nigeria and human rights activist Femi Falana has condemned the Nigerian National Petroleum Company Limited (NNPCL) for allegedly acting illegally by setting prices for Premium Motor Spirit (PMS) following deregulation.
In a statement issued on Tuesday, Falana argued that the NNPCL’s actions violate Section 205 of the Petroleum Industry Act (PIA).
Falana noted, “On September 5, 2024, the Nigerian National Petroleum Corporation Limited (NNPCL) explained that foreign exchange illiquidity was a major factor affecting the fluctuation in PMS prices, which are supposed to be determined by unrestrained market forces as stipulated in the PIA.”
He continued, “NNPCL clarified the pump price of imported PMS, with Executive Vice President of Downstream NNPC Ltd, Mr. Adedapo Segun, stating that Section 205 of the PIA mandates that petroleum prices should be set by market forces.
He said, The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd.
Additionally, the exchange rate plays a significant role in influencing these prices.”
Contrary to this statement, Falana claimed that NNPCL has fixed the price for PMS produced by the Dangote Refinery and Petrochemical Company Limited, a move he describes as a serious violation of Section 205 of the PIA, which requires petroleum prices to be set by market forces.
He further argued that since the petrol from Dangote Refinery is produced locally and not imported, the NNPCL cannot justify its pricing of ₦950 per litre, excluding additional costs like freight, lightering, and storage.
Falana accused the NNPCL of undermining the national economy by favoring the importation of cheaper petrol, thereby imposing higher costs on locally produced fuel.
Falana also questioned NNPCL’s rationale for purchasing petrol from Dangote Refinery in dollars, despite the Federal Executive Council’s directive for crude oil transactions to be conducted in Naira.
“Are the NNPCL and Dangote Refinery management not aware that refusing to accept Naira for transactions is a criminal offense under Section 20 of the Central Bank Act?” he asked.
He criticized the exclusive purchase arrangement between NNPCL and Dangote Refinery, calling it inconsistent with the principles of Section 205 of the PIA and urged the Federal Competition and Consumer Protection Commission to prevent NNPCL from monopolizing Dangote’s petrol.
Falana’s remarks follow the commencement of PMS lifting by NNPCL from Dangote Refinery on Sunday, with NNPCL announcing a price of ₦950 per litre in Lagos and over ₦1000 per litre in states like Borno.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) also criticized the NNPCL’s pricing.
IPMAN National Welfare Officer John Kekeocha expressed concern on Channels Television’s The Morning Brief, stating, “If NNPC can sell Dangote products higher than imported ones, it doesn’t make sense.
What are we celebrating then?”
