Falana Condemns NNPC’s Petrol Price Fixing From Dangote Refinery As Illegal

Falana Condemns NNPC’s Petrol Price Fixing From Dangote Refinery As Illegal

Human rights lawyer, Femi Falana (SAN), has condemned the Nigerian National Petroleum Company Limited (NNPCL) for setting the price of petrol from the Dangote Refinery, calling it a violation of the Petroleum Industry Act (PIA). In a statement on Tuesday, Falana argued that the NNPCL’s decision contradicts the government’s commitment to deregulating the oil sector, where fuel prices are meant to be determined by market forces……CONTINUE READING 

He stated, “On September 5, 2024, the NNPCL acknowledged that foreign exchange (forex) illiquidity was influencing the fluctuation in Premium Motor Spirit (PMS) prices, which are governed by market forces as stipulated in the PIA. However, despite this, the NNPCL has fixed the price of PMS produced by Dangote Refinery, which directly violates Section 205 of the PIA.”

Falana further criticized the ₦950 minimum price per litre set by NNPCL for petrol from Dangote Refinery, labeling it unjustifiable. He added that it is damaging for the national oil company to sell locally produced petrol at higher prices than imported fuel. According to Falana, the NNPCL’s justification, citing purchases in dollars from Dangote Refinery, contradicts the government’s directive that transactions between the two parties should be conducted in naira.

“Since Dangote’s petrol is produced domestically in the Lekki Free Trade Zone, the NNPCL cannot justify the ₦950 per litre price, especially without factoring in costs like freight, storage, and foreign exchange fees. By doing this, the NNPCL is continuing to undermine the national economy through the importation of cheaper petrol at a cost the country cannot afford,” Falana remarked.

He also pointed out that, according to the Central Bank Act, it is illegal to refuse naira as a means of payment within Nigeria, further questioning the legality of NNPCL’s dollar-based transactions with Dangote Refinery.

Additionally, Falana criticized the NNPCL’s exclusive role as the sole buyer of petrol from the Dangote Refinery. He urged the Federal Competition and Consumer Protection Commission (FCCPC) to intervene, arguing that other marketers should have direct access to purchase petrol from the refinery. He emphasized that monopolistic control by the NNPCL contradicts the provisions of the PIA, which encourages competition in the market.

Naija News reports that NNPCL officially began lifting petrol from Dangote Refinery on Sunday, announcing that the product would sell for ₦950 per litre in Lagos and over ₦1000 per litre in states like Borno.