The Nigerian National Petroleum Company Limited (NNPCL) has announced that Premium Motor Spirit (PMS), or petrol, from the Dangote Refinery will begin to flow into the market from 15 September 2024.

In a statement issued by NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, on Thursday in Abuja, the company revealed that the prices of petroleum products would be determined by market forces, as the downstream sector is fully deregulated.

This announcement follows the Dangote Refinery’s commencement of petrol refining earlier this week.

Soneye quoted NNPCL’s Executive Vice President of Downstream, Adedapo Segun, who reiterated that the company would no longer be involved in price fixing, quelling speculations that NNPCL might continue to control prices despite the deregulation of the sector.

The speculations arose from reports suggesting that NNPCL would be the sole distributor of petrol from the Dangote Refinery.

According to the statement, Segun explained that foreign exchange (forex) liquidity issues have contributed significantly to the fluctuation in PMS prices, which are now governed by unrestricted market forces under the provisions of the Petroleum Industry Act (PIA).

Segun also addressed the current fuel scarcity, assuring the public that it would ease in a few days as more stations adjust their pumps and begin selling PMS. He emphasised that Section 205 of the PIA mandates that fuel prices are determined by the free market, with the exchange rate being a key factor.

Regarding NNPCL’s role in lifting PMS from the Dangote Refinery, Segun stated that the company is awaiting the 15 September timeline for distribution.

While expressing concern over the fuel scarcity, Segun said NNPCL, which operates nearly 1,000 filling stations nationwide, is working closely with marketers to ensure stations open early and close late to meet the demand of Nigerians.

Segun reassured the public, “We are engaging with the relevant authorities to prevent product diversions and ensure timely deliveries to all stations. The scarcity should reduce in the coming days as more stations recalibrate and resume operations.”

The Federal Government recently announced an impending massive supply of petrol following the offloading of vessels but ruled out any price control for PMS.

NNPCL further disclosed that it had supplied 30 million barrels of crude oil to the Dangote Refinery and plans to deliver an additional 17 million barrels soon, including 6.3 million barrels in September and 11.3 million barrels in October. The 6.3 million barrels will be delivered in seven shipments.

Segun noted that the current pump price of petrol does not reflect true market conditions, adding that NNPCL remains the sole importer of PMS, a situation that is far from ideal. He stressed that prices should be dictated by the free market, rather than any single entity.

Addressing NNPCL’s position as the sole importer, Segun clarified that it was not a deliberate decision but a response to market realities. He explained, “NNPC did not set out to become a monopolist. We stepped in when other players reduced their participation.”

Segun pointed out that achieving a stable fuel supply and pricing requires a perfectly functioning market, which includes a more liquid foreign exchange market.

He concluded, “Once the Dangote Refinery begins to release PMS and NNPCL starts lifting, we will provide further details.”