. Says market open to lower prices
By Tochukwu Bliss, Abuja
The Nigerian National Petroleum Company Limited (NNPCL), has clarified that it is not the sole offtaker of products from the Dangote Refinery Limited (DRL), as widely reported.
On the contrary, the NNPC said the due to the nature of the oil and gas industry, which is internationally regulated, the downstream market is open to all participants, which will help bring down price in the domestic refineries.
Reacting to a statement by the Muslim Rights Concern (MURIC), concerning recent pump price increases, the Chief Corporate Communications Officer for the NNPC, Olufemi Soneye, in a counter statement on Saturday, clarified issues by the rights group.
Regarding the price increase, NNPC noted that: “The pricing of petroleum products from any refinery, including the Dangote Refinery Ltd (DRL), is determined by global market forces. “The recent changes in PMS prices have no impact on the DRL or any other domestic refinery’s access to the Nigerian market.
“In fact, if current prices are perceived as high, it presents an ideal opportunity for the refinery to sell its products at lower prices in the Nigerian market.”
There is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL.
The Company also reiterated that “there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL.”
It added that “The NNPC Ltd will only fully offtake PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria.
“The DRL and any other domestic refinery are free to sell directly to any marketer on a willing buyer, willing seller basis, which is the current practice for all fully deregulated products.”
Besides, “NNPC Ltd has no desire or intention to become the distributor for any entity in a free market environment, and therefore, the notion of becoming a sole offtaker does not arise,” it maintained.
On other issues raised, the statement emphasized that, “The NNPC Ltd cannot undermine a business in which it holds a billion-dollar stake.”
