The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has clarified that the Nigerian National Petroleum Company Limited (NNPCL) determining the price of petrol from the Dangote Refinery is within regulatory norms and not an overreach of authority.
Engr. Farouk Ahmed, CEO of NMDPRA, explained that the arrangement between Dangote Refinery and NNPCL operates on a willing seller-willing buyer basis. According to the Petroleum Industry Act (PIA) of 2021, market forces are responsible for setting petrol prices since the sector has been deregulated.
Concerns arose after NNPCL, as the sole purchaser of products from the Dangote Refinery, issued a price template showing ₦950.22 per litre in Lagos and ₦1,019.22 per litre in Borno. This led to fears that NNPCL was overstepping its role and taking over functions that should belong to NMDPRA.
Engr. Ahmed dismissed these concerns as unnecessary, stating that NNPCL’s pricing applies only to its own outlets, and other marketers are not obligated to adhere to these prices. He emphasized that the deregulated nature of the sector means prices are determined by market dynamics, and the presence of more players in the market would likely help stabilize prices.
The NMDPRA’s role is to prevent market exploitation and ensure fair practices, not to regulate prices directly. Ahmed reiterated that if the sector were still regulated, it would indicate that deregulation had not been fully implemented.
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