NNPC Limited will only become the sole distributor for Dangote Refinery if market prices exceed Nigeria’s pump prices.
The Nigerian National Petroleum Corporation (NNPC) has issued a statement clarifying its position on the pricing of petroleum products from domestic refineries, including the Dangote Refinery Ltd (DRL). Olufemi Soneye, Chief Corporate Communications Officer, emphasized that global market forces determine the pricing of petroleum products from any refinery.
NNPC noted that domestic refining does not guarantee lower prices, as confirmed by the DRL. The company stated that recent changes in petrol prices have not affected the DRL’s or any other domestic refinery’s access to the Nigerian market.
In fact, NNPC highlighted that current high prices present an opportunity for domestic refineries to sell their products at lower prices in the Nigerian market. The company reiterated that domestic refining does not guarantee lower prices compared to global parity pricing frameworks.
“The NNPC Ltd will only fully purchase Premium Motor Spirit (PMS) from the Dangote Refinery (DRL) if the market prices exceed the prevailing pump prices in Nigeria.
The DRL and other domestic refineries are at liberty to engage in direct sales to marketers on a willing buyer-willing seller basis, consistent with current practices for fully deregulated products.
NNPC Ltd has no interest in assuming distribution roles in a free market environment, thereby eliminating the notion of sole offtake.
Furthermore, NNPC Ltd cannot compromise a business venture in which it has a significant billion-dollar stake.”
