Senior Advocate of Nigeria and Human Rights Activist, Femi Falana, has condemned the Nigerian National Petroleum Corporation Limited (NNPCL) for its role in setting the price of Premium Motor Spirit (PMS), commonly known as petrol, following the sector’s deregulation.
Falana asserts that the actions of state oil companies are illegal and violate the Petroleum Industry Act (PIA).
In a statement released on Tuesday, he cited Section 205 of the PIA, emphasizing that the law requires petroleum prices to be determined by free market forces, not by the NNPCL.
He argued that the company’s involvement in price-setting contradicts the very deregulation process outlined in the law.
He said, “On September 5, 2024, the Nigerian National Petroleum Corporation Limited (NNPCL) stated that foreign exchange (forex) illiquidity had been a significant factor influencing the fluctuation in prices of Premium Motor Spirit (PMS) governed by unrestrained market forces, as provided for in the Petroleum Industry Act (PIA).
“The NNPCL was explaining the pump price of PMS imported into the country at the material time. Specifically, the Executive Vice President of Downstream NNPC Ltd Mr. Adedapo Segun, explained that Section 205 of the PIA, which established NNPC Ltd, stipulated that petroleum prices were determined by free market forces.
According to him, “The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices.”
‘But contrary to the well-publicised statement, the NNPCL has fixed the price of PMS produced by the Dangote Refinery and Petrochemical Company Limited. The action of the NNPCL is a violent contravention of section 205 of the PIA, which stipulates that the prices of petroleum products shall be determined by market forces.
“Furthermore, since the petrol sold by Dangote is not imported into the country but produced at the Lekki Economic Free Trade Zone, the NNPCL can not justify the sale of petrol at N950 per litre without freight cost, lightering cost, jetty depot fees, storage fees, foreign exchange costs, NPA charges: NIMASA charges, Customs duties etc.
‘In fact, by selling the petrol produced by Dangote Refinery at a higher price, the NNPCL has confirmed its resolve to continue to sabotage the national economy through the reckless importation of cheaper petrol from foreign countries at a cost that the nation cannot afford.
“The NNPCL has justified the hike by saying that petrol is sold in dollars by the Dangote Refinery. Why should the NNPCL buy petrol in dollars since the Federal Executive Council (FEC) has directed that crude oil be sold to Dangote Refinery in Naira? Are the management staff of NNPCL and Dangote Refinery not aware that it is a criminal offence under section 20 of the Central Bank Act to refuse to accept the naira as a means of payment for any transaction in the country?
