NNPC Ltd Clarifies Market Dynamics: Not the Sole Offtaker, Market Open for Competitive Pricing

Abuja, 7th September 2024 – The Nigerian National Petroleum Company Limited (NNPC Ltd) has issued a statement refuting claims by the Muslim Rights Concern (MURIC) that the company is obstructing Dangote Refinery Limited (DRL) from offering lower pump prices for Premium Motor Spirit (PMS) in the Nigerian market. According to NNPC Ltd, these assertions are misleading and do not accurately reflect the current market conditions.

NNPC Ltd emphasized that the pricing of petroleum products, including those from the Dangote Refinery, is governed by global market dynamics. The recent adjustments to PMS prices, the company clarified, do not hinder DRL or any other domestic refinery from accessing the Nigerian market. On the contrary, NNPC Ltd argued that if current market prices are considered high, it presents an opportunity for domestic refineries to sell their products at competitive prices.

Market-Driven Pricing and Open Competition

Addressing concerns about market pricing, NNPC Ltd underscored that there is no guarantee that domestic refining would result in lower prices compared to global pricing standards. The company stressed that it would only fully offtake PMS from DRL if the prevailing global market prices were higher than the local pump prices in Nigeria. In a deregulated market environment, DRL and other domestic refineries have the freedom to sell their products directly to any marketer on a willing buyer, willing seller basis. This policy, according to NNPC Ltd, affirms that there is no intention or desire on its part to become the sole distributor or offtaker of any refinery’s products.

“NNPC Ltd has no desire or intention to become the distributor for any entity in a free market environment,” the statement read, emphasizing that the notion of NNPC Ltd becoming a sole offtaker is baseless.

NNPC’s Stake in Dangote Refinery

The NNPC Ltd also dismissed the claim that it could undermine the Dangote Refinery, highlighting its substantial financial stake in the venture. The company clarified that any such action would be counterproductive given its significant investment in the DRL.

Call for Responsible Advocacy

Responding directly to MURIC, NNPC Ltd criticized the organization for making unfounded statements without verifying facts. The company accused MURIC of making potentially inflammatory claims that could incite public sentiment against NNPC Ltd.

“As an advocacy group for fair and just treatment, MURIC should have verified the facts before making statements that are entirely flawed and have the potential to incite ordinary Nigerians against the NNPC Ltd,” stated Olufemi Soneye, Chief Corporate Communications Officer of NNPC Ltd.

NNPC Ltd’s statement underscores its commitment to a competitive and transparent market environment, assuring Nigerians that the market remains open for all domestic refineries to offer competitive prices. The company reaffirmed its stance on fair competition and market-driven policies that benefit both the industry and consumers.