Opinion

NNPCL/Dangote: Not yet affordable fuel

By Moses Akaigwe

The Nigerian National Petroleum Company (NNPC) Limited price regime for Premium Motor Spirit (PMS) from Dangote Refinery, which shows a range between N950 (in Lagos), to N1,019 per litre (far north), has confirmed what anyone who could read between the lines had suspected long ago.

It was very easy to see beyond the smoke-screen of petrol scarcity of the past two months, the ding-dong between the NNPCL and the marketers and the eventual official increase of pump price from the previous N600 to N840.

That was why to any careful observer, it was not unreasonable to come to the conclusion that the artificial scarcity and the subsequent price hike were created with the Dangote Refinery products in mind.

Or, how else can the NNPCL explain the fact that a sharp pump price increase and an acute nationwide scarcity confronted the already impoverished  Nigerians at a time the Dangote Refinery was just about to come on stream and off-taking about to commence? What a curious and wonderful coincidence!

And, to complete the dramatisation of the full-script plot, the NNPCL followed up with an estimated price template of between N950.22 and N1,019.22 for Dangote’s PMS, claiming it received the product at N898 per litre.

Predictably, this provoked a lot of flaks from the public who could not understand why locally refined petrol, without freight charges, insurance, duties and other add-ons that go with importation, would attract such high pump prices.

But, Dangote Refinery has, through the Dangote Group’s Chief Branding and Communications Officer, Mr. Anthony Chiejina, debunked NNPCL’s claim of getting the supply at N898, promising to throw more light the pricing of the new refinery’s products later.

Chiejina had described the claim as “both misleading and mischievous,” disclosing that the new refinery sold the product to the NNPCL at a price cheaper than that at which it has been importing the product into the country.

So, since this is the case, why is the price range announced by the NNPCL as high as between N950 and N1,019 for the petrol from the Lekki, Lagos-based new refinery?

It would appear that subsidy which, it has been confirmed, still applies to imported fuel, has not been accommodated in arriving at the price template announced for Dangote Refinery’s products.

And, there is absolutely no reason why products of refineries in Nigeria should be excluded from the subsidy that applies to imported petroleum products, if the aim of the intervention is to absorb price shock and reduce ripple effects on cost of transportation, and prices of goods and services.

Before we forget, let it be recalled that when the PMS pump price was still N600 a litre some weeks ago, the Nigerian National Petroleum Company had announced that, that was about half of the landing cost of N1,200    meaning that the government through the company was subsidising the importation with about N500 or N600 per litre.

Except the NNPCL can come up with a plausible explanation to the contrary, it is only logical that subsidy should also apply to locally refined petroleum products, whether they are from Dangote’s refinery or any other refining facility in Nigeria.

Whether it is a matter of mere perception or there are deeper underlying reasons, NNPCL actions since the current fuel scarcity which has culminated in the upward adjustment of pump prices, is neither in the interest of the hapless consumers, nor does it help the achievement of energy security for which it was converted to a limited liability company.

The only way to interpret the obvious machinations is that the company is  desperately making efforts to ensure there isn’t much gap in prices between locally refined PMS and the imported petrol in order to sustain the suspected exploitation that is alleged to have been going on with the latter (fuel importation).

The questions that arise then are: If Dangote Refinery is forced to sell PMS almost at the same price per litre as imported fuel, where then are the much-trumpeted advantages of refining locally for internal consumption?

It might be correct then to conclude that the reason the four government-owned refineries (Eleme1 and 2, Calabar and Kaduna) have remained comatose for years is because some people at the ‘top’  prefer them so, in order that  importation will continue to thrive.

Somebody should draw the seemingly deaf ears of the people in the management of NNPCL and drum it in that the coming on stream of Dangote’s refinery is supposed to bring some kind of respite to Nigerians already traumatised by bad governance.

This is in view of the fact that the idea of modular and mega refining facilities in Nigeria has always raised the hope of bringing about product availability at reasonably reduced prices.

Experts in the oil and gas industry should find out if the Petroleum Industry Act signed into law in August 2021 empowers the NNPCL as the sole off-taker of products of private local refineries and determiner of their prices in the manner the company is currently doing.

It is either the NNPC has been acting outside the Petroleum Industry Law or is abusing it.

Either way, the hope of private refineries, like Dangote’s which is one of the largest in the world with 650,000 barrels per day capacity, ever solving the problem of scarcity and high cost  of petroleum products, will remain a mirage.

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