Human rights lawyer, Femi Falana, SAN, has declared it illegal for the Nigerian National Petroleum Company Limited (NNPCL) to set the price of Premium Motor Spirit (PMS) produced by the Dangote Refinery, following the deregulation of the oil sector. Falana’s statement on Tuesday highlighted that this action violates Section 205 of the Petroleum Industry Act (PIA), which mandates that fuel prices be determined by market forces.
Falana pointed out that on September 5, 2024, NNPCL attributed fluctuations in PMS prices to forex illiquidity, explaining that under the PIA, the market should dictate fuel prices. However, the NNPCL’s recent decision to fix the price of petrol from the Dangote Refinery contradicts this very principle.
“Section 205 of the Petroleum Industry Act clearly states that petroleum prices must be determined by market forces. Yet, NNPCL has unilaterally set the price of petrol produced by the Dangote Refinery, which is a direct violation of the law,” Falana said.
Falana emphasized that the petrol produced at the Dangote Refinery in the Lekki Free Trade Zone is not subject to the same costs as imported petrol, such as freight, jetty depot fees, and customs duties. Yet, the NNPCL has priced the locally-produced fuel at N950 per liter in Lagos, with prices exceeding N1,000 in other parts of the country, including Borno State.
Read also: Dangote Refinery breaks over five decades of energy insufficiency, insecurity jinx, says Chiejina
“How can petrol produced within Nigeria cost more than imported fuel when it bypasses many of the additional costs like freight, foreign exchange fees, and customs duties?” Falana questioned.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has also expressed dissatisfaction with the NNPCL’s pricing strategy. IPMAN criticized the NNPCL for pricing locally-produced petrol higher than imported fuel, sparking further debate over the legality and fairness of the decision.
The commencement of PMS lifting from the Dangote Refinery has triggered controversy, with many questioning why the NNPCL would impose such high prices. Critics argue that this pricing undermines the supposed benefits of local fuel production and contradicts the deregulated market structure outlined in the PIA.
With petrol prices already at record highs, the NNPCL’s decision to fix the price of fuel from the Dangote Refinery at N950 per liter could lead to further inflationary pressures. Many Nigerians are left wondering whether local fuel production will ever translate into more affordable prices.
