In a much-anticipated announcement, the Nigerian National Petroleum Company Limited (NNPC Ltd.) has clarified that Premium Motor Spirit (PMS) prices are now fully determined by market forces, emphasizing that foreign exchange (forex) scarcity significantly impacts price fluctuations. This declaration comes as Nigerians continue to feel the brunt of fuel scarcity across the country.
It will be recalled that in an interview on TVC “Journalists’ Hangout,” Mr. Adedapo Segun, the Executive Vice President of Downstream Operations at NNPC Ltd., reassured Nigerians that the current fuel crisis would ease within days, as filling stations recalibrate and resume the sale of PMS.
“The market is deregulated, which means the government and NNPC Ltd. no longer set petrol prices. Instead, prices are now dictated by free market forces, including exchange rates,” Segun explained. This shift stems from the Petroleum Industry Act (PIA) of 2021, which established a new pricing framework, removing government control over PMS pricing.
Segun further disclosed that NNPC Ltd. is working closely with petroleum marketers nationwide to ensure fuel stations open early and close late to meet consumer demand. With nearly a thousand stations under its control, NNPC Ltd. is committed to ensuring that fuel supply returns to normal soon.
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“We are engaging the relevant authorities to prevent product diversions and ensure timely deliveries. The scarcity will ease within days as more stations resume operations,” Segun assured.
As Nigerians eagerly await the distribution of fuel from the $20 billion Dangote Refinery, NNPC Ltd. confirmed that it expects to start lifting products from the refinery on September 15. The refinery’s output is anticipated to stabilize the country’s fuel supply in the coming months.
Despite recent rumors that NNPC Ltd. is selling PMS at inflated prices, Dangote Group has debunked these claims. A statement from Dangote Group’s Chief Branding and Communications Officer, Anthony Chiejina, clarified that the refinery has not yet begun selling petrol to NNPC, and the pricing reports are false. “We have not commenced lifting PMS from our refinery, and we urge the public to disregard misleading headlines,” Chiejina stated.
NNPC Ltd. also highlighted the critical role of foreign exchange in determining petrol prices. Forex illiquidity, which has plagued the Nigerian economy, has led to significant fluctuations in PMS prices. “The pump price of petrol does not yet reflect true market conditions, largely due to the current forex crisis,” Segun added. He further noted that NNPC’s role as the sole importer of petrol was not deliberate but a response to reduced market participation from other stakeholders.
Meanwhile, fuel marketers have raised concerns about over 2,000 tankers stranded at various NNPC depots, awaiting product delivery. The delay has exacerbated the fuel scarcity, with truckers left in limbo as they await official price adjustments from NNPC Ltd.
“The delay in communication on the price difference is leaving thousands of trucks stuck at depots,” said Mustapha Zarma, National Operations Controller of the Independent Petroleum Marketers Association of Nigeria.
Amidst the fuel crisis, the Federal Government has moved to reassure Nigerians of an imminent improvement in supply. Following a high-level meeting with Vice President Kashim Shettima, Petroleum Minister Heineken Lokpobiri, and NNPC Ltd. CEO Mele Kyari, the government emphasized its commitment to ensuring fuel availability across the country by the weekend.
While the government has ruled out fixing PMS prices, it believes that once supply stabilizes, the price of petrol will find its level in line with market realities. “Nigerians should not engage in panic buying, as fuel supply will stabilize soon,” Lokpobiri stated after the meeting.
