An advocacy group, the Yoruba Stakeholders Assembly, has debunked the impression of the federal government and Nigerian National Petroleum Company Limited (NNPC Ltd) controlling the prices of the product. The group rather stated that market forces dictate prices in a deregulated market.
By Emma Ogbuehi
Against the backdrop of controversies on the precise forces determining the pump price of the Premium Motor Spirit (PMS), otherwise called petrol, an advocacy group, the Yoruba Stakeholders Assembly, has debunked the impression of the federal government and Nigerian National Petroleum Company Limited (NNPC Ltd) controlling the prices of the product. The group rather stated that market forces dictate prices in a deregulated market.
It maintained that PMS prices are influenced by supply and demand, global oil prices, and operational costs, adding that the NNPC Ltd has engaged with private entities to ensure a steady fuel supply, promoting competition and potentially lowering prices.
Responding to the controversy over PMS pricing between the Dangote Refinery and NNPCL, the group in a statement released by its convener, Comrade Dayo Olawale, emphasized the importance of separating fact from fiction, especially when the livelihoods of ordinary Nigerians are at stake.
The statement titled ‘Separating Facts from Fiction’, said that “As a committed voice for transparency and awareness in Nigeria, the Yoruba Stakeholders Assembly seeks to address the recent misinformation surrounding the pricing of Premium Motor Spirit (PMS) in the country. In this era of rampant speculation and misinformation, it is crucial to separate fact from fiction—especially when the livelihoods of ordinary Nigerians are at stake.
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The statement, the group said, serves as a reminder that informed citizens are the backbone of a thriving democracy, stressing that a nuanced understanding of market dynamics, governmental roles, and inter-business negotiations is essential in fostering a culture of accountability and transparency. It urged Nigerians to remain vigilant, seek verifiable facts, and engage in productive discussions that ultimately contribute to a more sustainable future for our nation.
Olawale reeled out facts to back the stance of his group. On non-existence of government control over PMS pricing, he stated that contrary to popular belief, neither the government nor the NNPC Ltd possesses the authority to fix the price of PMS. The pricing mechanism for PMS, he said, has undergone a significant transformation, evolving into a deregulated market where market forces predominantly dictate prices. This framework is designed to create a competitive environment that benefits consumers while fostering a healthier economic climate.
He added; “Market forces at play: In a deregulated market, the price of PMS is influenced by multiple factors, including supply and demand, global oil prices, and operational costs related to refining and distribution. The NNPC Ltd has actively engaged with private entities to ensure a steady supply of fuel, thus promoting competition and potentially lowering prices.
“The reality of fuel acquisition rates: Recent discussions have brought to light the fact that NNPC Ltd procured fuel from Dangote Refinery at a cost of N898 per liter. It is critical to emphasize that NNPC Ltd’s engagement with Dangote was aimed exclusively at ensuring that Nigerians have access to fuel at a fair price. This negotiation process underscores NNPC Ltd’s commitment to representing the interests of the Nigerian populace.
“Sustaining affordable fuel prices: For the past year, the market price of petrol has hovered around N1,100 per liter. However, thanks to the proactive measures undertaken by NNPC Ltd, ordinary Nigerians have been shielded from these soaring prices, benefiting from a subsidized rate of N620 per liter. This has been possible due to NNPC Ltd covering the shortfall—an effort that, while noble, has become an unsustainable endeavor. This cry for sustainability reflects NNPC Ltd’s commitment to balancing providing affordable fuel and maintaining fiscal responsibility.
“Misconceptions regarding pricing dynamics: There is a misconception that the government dictated the pricing structure for Dangote’s fuel. In actuality, it is Dangote who independently decided to sell his refined fuel to NNPC Ltd at N898 per liter. Initial negotiations revealed Dangote’s proposed price to be well over N900 per liter, which NNPC Ltd successfully negotiated down to a more manageable rate for the benefit of the Nigerian consumer.
“Ensuring a competitive market landscape: NNPC Ltd’s directive to Dangote to also sell his fuel to other marketers, under a willing buyer-willing seller basis as outlined in the Petroleum Industry Act (PIA), reinforces the commitment to creating a competitive market. This action aims to ensure that pricing remains fair, accessible, and transparent—principles that should govern all transactions in the energy sector.
“Clarifying misunderstandings regarding pricing changes: Recent statements suggesting that Dangote intends to sell fuel to Nigerians at prices significantly lower than market rates, only for the government to intervene, are grossly misinformed. The narrative that suggests government manipulation of fuel prices is not grounded in reality. The truth lies in the fact that the price negotiated by NNPC Ltd is a direct result of market influences, competitive negotiations, and the pressing need to ensure fair access to fuel for all Nigerians.
The group urged Nigerians to remain wise and discerning consumers of information, adding that it is vital for the public discourse to be anchored in facts rather than fiction so that the country can address the challenges it faces with integrity and transparency. It further asked the citizens to remain vigilant, seek verifiable facts, and engage in productive discussions to contribute to a more sustainable future.