Senior Advocate of Nigeria and Human Rights Activist, Femi Falana, has declared it “illegal” for the Nigerian National Petroleum Corporation Limited (NNPCL) to set the prices of Premium Motor Spirit (PMS), commonly known as petrol, following the deregulation of the oil sector.
In a statement released on Tuesday, Falana argued that the actions of NNPCL violate Section 205 of the Petroleum Industry Act (PIA). He explained that on September 5, 2024, NNPCL had attributed the fluctuation in PMS prices to the scarcity of foreign exchange (forex), noting that prices were now dictated by market forces as stipulated by the PIA. The Executive Vice President of NNPC Ltd’s Downstream sector, Mr. Adedapo Segun, emphasized that with the deregulation of the market, petrol prices were no longer determined by the government or NNPCL but by the free market, with exchange rates significantly influencing prices.
However, Falana contended that NNPCL had contradicted its own claims by setting the price of PMS produced by the Dangote Refinery and Petrochemical Company Limited. He described this as a violation of Section 205 of the PIA, which mandates that petroleum product prices be determined by market forces, not set by NNPCL. He also noted that since the petrol from Dangote’s refinery is locally produced at the Lekki Economic Free Trade Zone and not imported, NNPCL could not justify the high price of ₦950 per litre, especially since costs related to imports, such as freight, lightering, depot fees, and customs duties, are not applicable in this case.
Falana further criticized NNPCL’s justification that the refinery sells petrol in dollars, questioning why the company is purchasing petrol in foreign currency when the Federal Executive Council (FEC) had mandated that crude oil be sold to the Dangote Refinery in naira. He pointed out that refusing to accept naira as payment is a criminal offense under Section 20 of the Central Bank Act. Additionally, Falana condemned NNPCL’s exclusive right to purchase petrol from the Dangote Refinery, calling it a violation of the competitive spirit of Section 205 of the PIA. He argued that other marketers should be free to buy and distribute the refinery’s petrol, and urged the Federal Competition and Consumer Protection Commission (FCCPC) to prevent NNPCL from maintaining monopolistic control over petrol distribution from the refinery.
This critique from Falana comes in the wake of NNPCL’s commencement of PMS lifting from the Dangote Refinery. Once the lifting began, NNPCL announced that petrol would be sold at ₦950 per litre in Lagos and surrounding areas, with prices exceeding ₦1,000 per litre in states like Borno.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) also voiced its dissatisfaction with NNPCL’s pricing strategy. On Monday, IPMAN’s National Welfare Officer, John Kekeocha, expressed his concerns during an interview on Channels Television’s The Morning Brief. He criticized the decision to sell Dangote-produced petrol at a higher price than imported products, questioning the purpose of the refinery’s celebration if the end result was higher prices for locally produced fuel.
