Says cost subject to market forces
By Joyce Osaji
A group, the Yoruba Stakeholders Assembly(YSA) has absolved the Federal Government and the Nigerian National Petroleum Company Limited (NNPCL) of allegations of fixing the pump price of petrol nationwide.
In a statement issued on Thursday, titled, ‘Separating Facts from Fiction’ and signed by Comrade Dayo Olawale, its Convener, the group said it was imperative to address what it described as the recent misinformation surrounding the pricing of Premium Motor Spirit (PMS) in the country, in this era of rampant speculation and misinformation noting that it is crucial to separate fact from fiction especially when the livelihoods of ordinary Nigerians are at stake.
Continuing, the YSA said a nuanced understanding of market dynamics, governmental roles, and inter-business negotiations is essential in fostering a culture of accountability and transparency. It therefore urged all Nigerians to remain vigilant, seek verifiable facts, and engage in productive discussions that ultimately contribute to a more sustainable future for our nation.
“Contrary to popular belief, it is imperative to clarify that neither the government nor the Nigerian National Petroleum Company Limited (NNPC Ltd) possesses the authority to fix the price of PMS. The pricing mechanism for PMS has undergone a significant transformation, evolving into a deregulated market where market forces predominantly dictate prices. This framework is designed to create a competitive environment that benefits consumers while fostering a healthier economic climate.
“In a deregulated market, the price of PMS is influenced by multiple factors, including supply and demand, global oil prices, and operational costs related to refining and distribution. The NNPC Ltd has actively engaged with private entities to ensure a steady supply of fuel, thus promoting competition and potentially lowering prices” the group said in the statement.
Going further, YAS said recent discussions had brought to light the fact that NNPC Ltd procured fuel from Dangote Refinery at a cost of N898 per liter. It said it was important to emphasize that NNPC Ltd’s engagement with Dangote was aimed exclusively at ensuring that Nigerians have access to fuel at a fair price noting that the
negotiation process underscores NNPC Ltd’s commitment to representing the interests of the Nigerian populace. According to the statement.
“For the past year, the market price of petrol has hovered around N1,100 per litre. However, thanks to the proactive measures undertaken by NNPC Ltd, ordinary Nigerians have been shielded from these soaring prices, benefiting from a subsidized rate of N620 per liter. This has been possible due to NNPC Ltd covering the shortfall—an effort that, while noble, has become an unsustainable endeavor. This cry for sustainability reflects NNPC Ltd’s commitment to balancing providing affordable fuel and maintaining fiscal responsibility.
“There is a misconception that the government dictated the pricing structure for Dangote’s fuel. In actuality, it is Dangote who independently decided to sell his refined fuel to NNPC Ltd at N898 per liter. Initial negotiations revealed Dangote’s proposed price to be well over N900 per liter, which NNPC Ltd successfully negotiated down to a more manageable rate for the benefit of the Nigerian consumer”.
The group said NNPC Ltd’s advice to Dangote to also sell his fuel to other marketers, under a willing buyer-willing seller basis as outlined in the Petroleum Industry Act (PIA), reinforces its commitment to creating a competitive market. This action, it said, aims to ensure that pricing remains fair, accessible, and transparent—principles that should govern all transactions in the energy sector.
Contrary to popular belief, it is imperative to clarify that neither the government nor the Nigerian National Petroleum Company Limited (NNPC Ltd) possesses the authority to fix the price of PMS. The pricing mechanism for PMS has undergone a significant transformation, evolving into a deregulated market where market forces predominantly dictate prices. This framework is designed to create a competitive environment that benefits consumers while fostering a healthier economic climate.
YSA stated that recent statements suggesting that Dangote intends to sell fuel to Nigerians at prices significantly lower than market rates, only for the government to intervene, are grossly misinformed. It said this narrative that suggests government manipulation of fuel prices is not grounded in reality. It stated that the truth lies in the fact that the price negotiated by NNPC Ltd is a direct result of market influences, competitive negotiations, and the pressing need to ensure fair access to fuel for all Nigerians.
“In conclusion, as we navigate these turbulent waters of economic discourse and fuel pricing, we urge all Nigerians to remain wise and discerning consumers of information. It is vital for the public discourse to be anchored in facts rather than fiction so that we, as a nation, can collectively address the challenges we face with integrity and transparency”, the group said in the state.
