The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has addressed the recent controversy concerning the pricing of petrol from the Dangote Refinery, specifically regarding the role of the Nigerian National Petroleum Company Limited (NNPCL).
NMDPRA has refuted claims that NNPCL is overstepping its regulatory authority, asserting that the pricing arrangement is governed by market forces rather than regulatory interference.
In a statement, NMDPRA’s Chief Executive Officer, Engr. Farouk Ahmed, clarified that the pricing model adheres to the guidelines established by the Petroleum Industry Act (PIA) of 2021, which aims to deregulate the petroleum sector.
Ahmed explained that petrol prices in Nigeria are now determined by market dynamics rather than by regulatory bodies. The agreement between NNPCL and the Dangote Refinery operates on a “willing buyer, willing seller” principle, reflecting the market-based approach introduced by the PIA.
He addressed industry concerns by emphasizing that NMDPRA’s role is to prevent market manipulation and ensure consumer protection, rather than setting prices directly.
Furthermore, Ahmed noted that the pump price template issued by NNPCL, which set petrol prices at ₦950.22 per litre in Lagos and ₦1,019.22 per litre in Borno, applies only to NNPCL’s outlets. Other marketers are at liberty to determine their own pricing structures.
The clarification follows speculation that NNPCL may have overstepped its bounds by assuming a regulatory role in setting prices. However, Ahmed downplayed these concerns, asserting that the pricing strategy is consistent with the principles of a deregulated market, rather than an imposition by NNPCL.
In an interview with Daily Trust, Ahmed attributed the higher petrol prices to supply limitations and the currently limited number of market participants. He suggested that increased competition would lead to more stable pricing and cautioned against expecting government regulation in a market that has been deregulated.
Ahmed stated, “We aim to avoid unnecessary controversy. To clarify, the recent transaction between NNPCL and Dangote Refinery is based on voluntary agreements between buyers and sellers. Higher prices reflect current supply constraints and the limited number of market participants.”
He added, “If there is an expectation for us to regulate prices, it would imply that the sector has not been fully deregulated, which would only exacerbate existing problems.”
