Human rights lawyer and Senior Advocate of Nigeria, Femi Falana, has criticized the Nigerian National Petroleum Company Limited (NNPCL) for setting the price of petrol produced by the Dangote Refinery.
According to Falana, this action is illegal and goes against the provisions of the Petroleum Industry Act (PIA), specifically Section 205, which requires that the price of petroleum products be determined by free market forces after deregulation.
In a statement released on Tuesday, Falana explained that the NNPCL’s decision to fix petrol prices violates the legal framework governing the country’s oil industry.
He pointed out that Section 205 of the PIA clearly states that petroleum prices must be dictated by the open market, rather than being controlled by any entity, including the NNPCL.
“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.
“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 cannot 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,” he said.
