NNPCL Fixing Dangote Petrol Prices is Unlawful, Says Falana

Legal expert Femi Falana has declared it illegal for NNPCL to fix the price of petrol produced by Dangote Refinery. Find out more about his statement.

According to human rights lawyer Femi Falana, SAN, the Nigerian National Petroleum Company Limited (NNPCL) does not have legal authority to set the price of Premium Motor Spirit (petrol), also known as petrol, at Dangote Refinery following deregulation.

In a statement made on Tuesday, Falana observed that the NNPCL’s conduct is in violation of Section 205 of the Petroleum Industry Act (PIA).

The Nigerian National Petroleum Corporation Limited (NNPCL) declared on September 5, 2024 that the unavailability of foreign exchange (forex) was a major contributor to the inconsistent pricing of Premium Motor Spirit (PMS), which is controlled by market forces without any restrictions under the provisions set forth in the Petroleum Industry Act, PIA.

During that time, the NNPCL clarified how the pump price of PMS brought into the nation was decided. In particular, Mr. Adedapo Segun, Executive Vice President of Downstream NNPC Ltd elucidated that Section 205 of the PIA created NNPC Ltd and mandated petroleum prices to be determined by free market forces.

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However, despite the publicly announced statement, the NNPCL has set a price for PMS manufactured by Dangote Refinery and Petrochemical Company Limited. This move goes against section 205 of the PIA that mandates petroleum product pricing be dictated by market forces- making it a severe violation.

He stated that the sale of petrol at N950 per litre by NNPCL cannot be justified, as Dangote produces their own petrol within the country and does not require freight costs, lightering costs, jetty depot fees, storage fees or foreign exchange costs. In addition to this fact are additional charges such as those from NPA charges: NIMASA charges and Customs duties etc., which further increase the selling price beyond reasonable limits.

The NNPCL’s lifting of PMS from the Dangote Refinery was promptly accompanied by Falana’s sudden outburst.

As soon as lifting started, NNPCL announced that they would be selling the product for N950 per litre in Lagos State and its surroundings. In other states like Borno, it will cost over N1,000 per litre. This was reported by OBASANJONEWS.

On Monday, the Independent Petroleum Marketers Association of Nigeria (IPMAN) criticized NNPCL for what they perceived to be unfair pricing practices. Specifically, IPMAN found fault with the fact that petrol obtained from Dangote Refinery was priced higher than imported alternatives.