It is unlawful for NNPC to fix Dangote refined PMS, says Falana

Human rights crusader, Mr. Femi Falana (SAN), has called on the Federal Competition and Consumer Protection Commission (FCCPC) to stop the Nigerian National Petroleum Corporation Limited (NNPCL) from exercising monopolistic control over the Premium Motor Spirit (PMS) produced by Dangote Refinery.

The lawyer argued that the exclusive purchase of petrol from Dangote Refinery by NNPCL is completely at variance with the letter and spirit of Section 205 of the Petroleum Industry Act (PIA).

He stated that other marketers should be at liberty to purchase petrol directly from Dangote Refinery and distribute it to outlets in all states of the Federation.

Falana referred to the explanation by the Executive Vice President of Downstream NNPC Limited, Mr. Adedapo Segun, that Section 205 of the PIA, which established NNPC Limited, stipulated that petroleum prices were to be determined by free market forces.

“On September 5, 2024, the Nigerian National Petroleum Corporation Limited (NNPCL) stated that foreign exchange (forex) illiquidity had been a significant factor influencing the fluctuation in prices of Premium Motor Spirit (PMS), governed by unrestrained market forces as provided for in the Petroleum Industry Act (PIA),” he said, adding that “the market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices.”

However, contrary to this statement, NNPCL has fixed the price of PMS produced by Dangote Refinery and Petrochemical Company Limited. Falana argues that this action is a clear contravention of Section 205 of the PIA, which mandates that petroleum product prices should be determined by market forces.

Falana pointed out that since the petrol sold by Dangote is produced at the Lekki Economic Free Trade Zone and not imported into the country, NNPCL cannot justify selling it at N950 per litre without considering freight costs, lightering costs, jetty depot fees, storage fees, foreign exchange costs, NPA charges, NIMASA charges, and Customs duties.

He said, “In fact, by selling petrol produced by Dangote Refinery at a higher price, NNPCL has demonstrated its intention to continue sabotaging the national economy by recklessly importing cheaper petrol from foreign countries, which the nation cannot afford.

“NNPCL has justified this price hike by stating that Dangote Refinery sells petrol in dollars. However, Falana questions why NNPCL is purchasing petrol in dollars when the Federal Executive Council (FEC) has directed that crude oil be sold to Dangote Refinery in Naira.

“Are the management staff of NNPCL and Dangote Refinery not aware that refusing to accept the naira as a means of payment for any transaction in the country is a criminal offense under Section 20 of the Central Bank Act?”