The Nigerian National Petroleum Company Limited (NNPC Ltd) has strongly denied allegations that it is working to undermine the operations of the Dangote Refinery, asserting that the petroleum market in Nigeria remains open and competitive, allowing for fair pricing from any domestic refinery.
The rebuttal comes in response to accusations made by the Muslim Rights Concern (MURIC), which claimed that recent adjustments to the pump price of Premium Motor Spirit (PMS) would prevent the Dangote Refinery from offering competitive prices.
Professor Ishaq Akintola, the Executive Director of MURIC, raised concerns that the Nigerian government’s pricing policies could potentially stifle the Dangote Refinery’s ability to operate freely in the market.
MURIC further alleged that NNPC Ltd had positioned itself as the sole offtaker of all products from the Dangote Refinery, effectively creating a monopoly that could harm market dynamics and limit consumer options.
In a detailed response issued by Olufemi Soneye, Chief Corporate Communications Officer of NNPC Ltd, the company firmly rejected MURIC’s claims, stating that the pricing of petroleum products from any refinery, including the Dangote Refinery, is strictly determined by global market forces and not by domestic manipulations.
Soneye emphasised that NNPC Ltd has no vested interest in undermining the Dangote Refinery, particularly given its significant investment in the project.
He underscored that NNPC Ltd is a key stakeholder with a billion-dollar stake in the refinery, making it illogical and counterproductive for the company to engage in actions that would undermine its own investment.
“To set the records straight, NNPC Ltd wishes to clarify the following points: The pricing of petroleum products from any refinery, including the Dangote Refinery Ltd (DRL), is dictated by global market dynamics.
The recent changes in PMS prices have no impact on DRL or any other domestic refinery’s access to the Nigerian market,” the statement read. Soneye further elaborated that while domestic refining offers potential advantages, it does not inherently guarantee lower prices compared to global parity pricing frameworks, a reality confirmed by the Dangote Refinery itself.
Addressing the specific concern that NNPC Ltd might monopolise the purchase of products from the Dangote Refinery, the statement clarified that NNPC Ltd would only fully offtake PMS from the refinery if market prices exceed the pump prices in Nigeria.
This arrangement allows the Dangote Refinery, as well as any other domestic refinery, the freedom to sell directly to any marketer on a willing buyer, willing seller basis, a practice that aligns with the current deregulated market approach for petroleum products in Nigeria.
This policy ensures that refineries can operate without restrictive interference from NNPC Ltd or any other entity.
Soneye criticised MURIC for not thoroughly verifying the facts before making public statements that could mislead the public and create unwarranted hostility towards NNPC Ltd.
He reiterated that the corporation remains committed to fostering a competitive market environment that benefits consumers and supports the growth of domestic refining capabilities in Nigeria.
The broader context of these allegations relates to Nigeria’s ongoing efforts to reform its petroleum sector, which has long been plagued by inefficiencies, corruption, and a heavy reliance on imported refined products despite being one of Africa’s largest oil producers.
The Dangote Refinery, once fully operational, is expected to be a game-changer for Nigeria’s oil and gas industry, significantly reducing the nation’s dependency on imported fuels and enhancing energy security.
However, its success hinges on a supportive regulatory environment that encourages fair competition and market-driven pricing.
NNPC Ltd’s investment in the Dangote Refinery underscores its strategic interest in supporting domestic refining and enhancing Nigeria’s self-sufficiency in fuel production.
By dismissing MURIC’s allegations, NNPC Ltd aims to reassure the public and stakeholders that it remains a partner rather than an adversary in the pursuit of a more robust and resilient petroleum sector.
As the largest stakeholder in Nigeria’s energy sector, NNPC Ltd’s role is crucial in shaping the future of the industry.
Its commitment to maintaining an open market is pivotal, not just for the success of the Dangote Refinery, but also for encouraging further investments in local refining capabilities.
This approach aligns with the broader national objective of reducing the economic drain caused by fuel imports and achieving energy independence.
In conclusion, NNPC Ltd has made it clear that it stands by the principles of fair market competition and transparency.
It invites all stakeholders, including emerging domestic refineries like the Dangote Refinery, to thrive in a market governed by global standards and free from undue influence.
The company reaffirms its dedication to supporting Nigeria’s journey towards becoming a leading player in the global petroleum market, driven by efficient, competitive, and sustainable practices.
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