The Nigerian National Petroleum Company Limited (NNPCL) has announced that Premium Motor Spirit (PMS), commonly known as petrol, from the Dangote Refinery will start entering the market on the 15th of this month, that is nine days from today, September 6, 2024.
Although this development may result in the stabilization of supplies to the local market, it is unlikely to translate to lower prices as the NNPCL, which fixes prices but claims they are determined by market forces, has said local product prices will be determined by the exchange rate of the naira to the dollar, even hinting that a new price hike may well be in the offing.
In what appeared to be an effort to address rumours about price, the NNPCL, in a statement issued yesterday (Thursday, September 5) by its Chief Corporate Communications Officer, Olufemi Soneye, clarified that petrol prices would now be dictated by market forces, emphasizing that the downstream sector is fully deregulated and NNPCL will no longer set fuel prices.
Adedapo Segun, NNPCL’s Executive Vice President of Downstream, explained that foreign exchange (forex) illiquidity has been a major factor behind PMS price fluctuations, which are now regulated by the free market as stipulated by the Petroleum Industry Act (PIA).
Segun also noted that the current fuel scarcity is expected to ease in the coming days as more filling stations recalibrate their systems and resume petrol sales. He referred to Section 205 of the PIA, which mandates that petroleum prices are governed by market forces rather than government intervention. He further highlighted the significant impact of exchange rates on fuel prices.
Regarding the supply from the Dangote Refinery, Segun stated that NNPCL is preparing for the September 15 timeline when products will be ready for distribution. He assured Nigerians that NNPCL is working closely with fuel marketers to ensure stations remain open and well-stocked to meet demand, while steps are being taken to prevent product diversion.
Segun’s comments follow the Federal Government’s announcement of an upcoming boost in petrol supply over the weekend, as vessels have started offloading, reaffirming that PMS prices will not be set by the government.
