PMS Pricing: Dangote Refinery Goofed Again, by Adewole Kehinde

“Sincerity makes the very least person to be of more value than the most talented hypocrite.” – fo

On Saturday, no fewer than 300 trucks from the Nigerian National Petroleum Company Limited arrived at the Dangote refinery, located in the Ibeju-Lekki area of Lagos State, to lift the first batch of petrol.

On Sunday, some online media claimed that the Nigerian National Petroleum Company Limited purchased petrol at N760 per litre from the Dangote refinery. 

In an interview with some media outfit, the NNPC spokesman, Olufemi Soneye, denied the claim that the company purchased Premium Motor Spirit at N760 per litre but N898 per litre from Dangote refinery. 

However, in its reaction on Sunday night, the Dangote Refinery described the claim as “misleading and mischievous,”  aimed at undermining the refinery’s achievement in addressing Nigeria’s energy insufficiency.

The company’s Group Chief Branding and Communications Officer, Anthony Chiejina, urged Nigerians to disregard the “malicious statement” and await a formal announcement on the pricing by the Technical Sub-Committee on Naira-based crude sales to local refineries, appointed by President Bola Ahmed Tinubu, which will commence on 1 October.

It pointed out that buying its current stock of crude in dollars and selling it to NNPC in dollars resulted in significant savings over current imports.

The statement by Mr Chiejina, however, failed to tell Nigerians the price at which the refinery sold its petrol to NNPC Ltd.

In his reaction to Dangote Refinery’s statement, Mr. Soneye insisted that the company bought petrol from Dangote Refinery at N898 per litre.

“If the price isn’t N898, then what is it? We would be happy to receive a discount. Throughout the day, various figures have been circulating, some claiming N1,300, Punch reported around N767, and another outlet mentioned N500. It’s our responsibility to clarify the facts. The truth is, that the government is not setting fuel prices, nor is NNPC Ltd. It’s a deregulated market where prices are determined by market forces.

“Let them tell you their price. I stand by my earlier comment. Will you allow customers to carry your product without a price agreement?” Mr. Soneye said on Monday.

In a separate statement announcing the estimated price of petrol obtained from the Dangote Refinery, the NNPC said it is paying the refinery in United States dollars for September 2024 petrol offtake, as Naira transactions will only commence on 1 October.

“The NNPC Ltd. also wishes to state that, in line with the provisions of the Petroleum Industry Act (PIA), PMS prices are not set by the government but negotiated directly between parties at arm’s length.

“The NNPC Ltd. can confirm that it is paying Dangote Refinery in USD for the September 2024 PMS offtake, as Naira transactions will only commence on 1st October 2024.” Mr. Soneye said.

I recall in July 2024 that the Federal Executive Council presided over by President Bola Tinubu, directed NNPC Ltd. to engage the Dangote refinery and other local refineries to resolve the dispute over the sale of crude oil to them and also directed that such crude oil sales to the refineries be made in naira and that the refineries located in Nigeria should also sell their refined products to the Nigerian market in naira.

Meanwhile, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, said that following the Nigerian National Petroleum Company Limited officially lifting refined petrol from the Dangote Petroleum Refinery, the federal government is giving relevant parties a chance to reduce the cost of petrol.

How can the price be reduced when Dangote Petroleum Refinery is selling at N898 per litre to the Nigerian National Petroleum Company Limited?

The truth is that for the Federal Government to allow relevant oil stakeholders a chance to reduce petrol prices, Dangote Petroleum Refinery must come out clean on its transaction. 

It should not yet be a triumph for Alhaji Aliko Dangote until Dangote Petroleum Refinery revealed the actual price of PMS directly from its refinery to Nigerians. 

Adewole Kehinde is a public affairs analyst based in Abuja. 08166240846. kennyadewole@gmail.com