Amid rising tensions between Dangote Refinery and the Nigeria National Petroleum Company Limited (NNPCL) over crude oil supply, product off-take, and retail pricing, the Federal Government of Nigeria has clarified its position, opting to distance itself from the ongoing conflict.
Bayo Onanuga, Special Adviser on Information and Strategy to President Bola Ahmed Tinubu, addressed the media in Abuja on Wednesday, highlighting the government’s hands-off approach following the deregulation of the petroleum market. He stated that companies like Dangote Refinery and NNPCL now operate independently within the existing economic landscape.
Onanuga emphasized that these entities have the autonomy to establish their petrol prices officially referred to as “Premium Motor Spirit” (PMS), based on market conditions. “In a competitive market, alternative suppliers and pricing competition could emerge, potentially leading to a decrease in fuel prices over time as companies strive to attract consumer patronage,” he explained.
Despite being viewed as a potential driver of economic growth, the Dangote Refinery has yet fully realize this promise. Recently, Aliko Dangote, CEO of the refinery, addressed fuel pricing concerns, asserting that his company sells petrol to NNPC at lower prices than those incurred by NNPCL for imported fuel.
The government’s stance diverges from previous suggestions from Dangote Refinery that the Federal Government should intervene in setting prices. Onanuga reaffirmed that both entities have the legal right to determine their pricing without government interference, noting that while NNPCL has historical ties to the state, it currently functions as a limited liability company.
In addition, Onanuga pointed out that private marketers have raised concerns about the high prices set by major players like Dangote and NNPCL. This has prompted some marketers to consider importing petrol independently, potentially igniting a pricing competition that could benefit consumers by driving prices down.
The Federal Government has made it clear that it will not engage in the pricing disputes between Dangote Refinery and NNPCL, reinforcing that both entities have the legal authority to set their prices as they see fit. Onanuga stated firmly, “The government will not get involved in this controversy.”
