Citing the fact that both companies are private, the Presidency has provided an explanation for why government institutions are unable to intervene in the ongoing price dispute between Nigerian National Petroleum Company Limited and Dangote Refinery.
The Special Assistant to the Honorable Minister for Petroleum Resources (Oil), Senator Heineken Lokpobiri, made a statement to the media on Friday, and according to Nnaamaka Okafor, the President supported the minister’s position over the price dispute between the NNPCL and Dangote Petroleum Refinery.
Remember how Lokpobiri had said, following a quick meeting with Vice President Kashim Shettima earlier this month, that while gas prices may vary across the nation, they will eventually stabilize once products are available everywhere.
The minister went on to say that since the industry is deregulated, price fixing is not the government’s responsibility.
“What is important is that the government is not fixing prices,” the minister had stated. This industry is unregulated. Additionally, we think that the pricing will level off as more products become available. And it’s critical that Nigerians understand this.
“There shouldn’t be panic shopping since there is enough merchandise in the nation to suit Nigerians’ wants. Furthermore, we think Nigerians should be aware that price fixing is not done by the government. I wish to make that clear to Nigerians.
Though confirming this at a press briefing, Special Advisor to the President on Information and Strategy, Mr. Bayo Onanuga, also emphasized what Lokpobiri had previously stated—that both entities operate independently in a deregulated market—Okafor pointed out in the statement released on Friday.
He noted that even though NNPCL is owned by the government, it operates independently under the Petroleum Industry Act.
“The PMS regime, or the Premium Motor Spirit field, has been deregulated. Dangote is an independent business. Remembering that NNPCL is a limited liability company is important. Whatever dispute either of them is involved in is a personal issue.
Even though NNPCL is owned by the federal, state, local, and federal governments, among other entities, it is functioning as a limited liability corporation under the provisions of the Petroleum Industry Act.
As you can see, the private market has expressed what it believes to be an excessive price for either Dangote or NNPC. At the end of the day, they empty the market, therefore they will decide to import fuel. If a price war breaks out, the consumer wins because the public market can enter the market, bring in fuel from NNPC, and sell it for a price that they believe is both profitable and reasonable.
“In light of this, I would respond that the government is staying out of this debate. Dangote operates independently as a private enterprise. According to the statement, Onanuga stated, “NNPC is a limited liability company, and it has the right to fix the price of its own and so on.”
Onanuga continued, saying that rather of interfering, the government intends to support alternative energy sources like compressed natural gas (CNG), providing consumers with a less expensive option and offsetting vehicle conversion costs.
He pointed out that the price difference is substantial, with PMS costing over N850 per litre and CNG costing roughly N230.
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