The Nigerian National Petroleum Company Limited (NNPC Ltd.) has strongly denied allegations made by the Muslim Rights Concern (MURIC) that it is undermining Dangote Refinery Limited (DRL) and monopolizing the sale of Premium Motor Spirit (PMS) in Nigeria. This clarification comes as a follow-up to a report by The Metro, which highlighted concerns from MURIC regarding NNPC’s alleged actions affecting the operations and market entry of the Dangote Refinery.
MURIC had asserted that recent pump price adjustments by NNPC Ltd. would hinder the Dangote Refinery from providing more competitive prices and that NNPC Ltd. had positioned itself as the sole offtaker of all PMS products from the refinery. The advocacy group suggested that such a monopoly could stifle competition and prevent consumers from benefiting from potentially lower prices offered by Dangote Refinery.
In response, NNPC Ltd., in a press release signed by its Chief Corporate Communications Officer, Olufemi Soneye, categorically refuted these claims, stating that the Nigerian market remains open to any refinery that can offer lower prices. “The pricing of petroleum products from any refinery, including the Dangote Refinery Ltd. (DRL), is determined by global market forces,” the statement read. It further clarified that the recent changes in PMS prices do not impact DRL or any other domestic refinery’s ability to access the Nigerian market, reinforcing that there is no exclusive agreement with Dangote Refinery that could be interpreted as a monopoly.
NNPC Ltd. elaborated that the notion of becoming a sole offtaker does not arise in a free-market environment, stating, “The DRL and any other domestic refinery 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 NNPC emphasized that its role is not to become the exclusive distributor for any entity, including Dangote Refinery, especially when it operates in a deregulated market context.
Further reinforcing its stance, NNPC Ltd. pointed out that it cannot sabotage a business where it has substantial financial investments. “The NNPC Ltd. cannot undermine a business in which it holds a billion-dollar stake,” the statement noted, referring to the $2.7 billion stake NNPC acquired in the Dangote Refinery. This financial commitment signifies NNPC’s vested interest in the success of the refinery.
NNPC Ltd. also criticized MURIC for not verifying its information before making potentially misleading statements that could provoke public discontent against the NNPC. “As an advocacy group for fair and just treatment, MURIC should have verified the facts before making statements that are entirely flawed and have the potential to incite ordinary Nigerians against the NNPC Ltd.,” Soneye said in the release.
The Metro report also discussed concerns surrounding the high stakes of both parties in ensuring that the deregulated fuel market thrives. Dangote Refinery, projected to refine 650,000 barrels of crude oil per day, is poised to alter Nigeria’s fuel landscape by potentially reducing dependency on fuel imports and stabilizing domestic supply. However, NNPC’s clarification highlights that the refinery’s pricing and market impact will be determined by competitive global and local dynamics, not by exclusive deals.
As public discourse continues, the NNPC’s clarification seeks to underscore its commitment to maintaining a fair and competitive market environment, where multiple players, including Dangote Refinery, have equal opportunities to operate and offer their products at competitive prices. This stance aims to reinforce the ongoing deregulation efforts in the petroleum sector, ensuring transparency and fair play for all stakeholders involved.
