Nigerian government not dabbling into NNPC, Dangote controversy – presidential aide

The Nigerian government said it is not intervening in the controversy between the Nigerian National Petroleum Company Limited (NNPC Ltd) and the Dangote Petroleum Refinery.

The Special Adviser to President Bola Tinubu on Information and Strategy, Bayo Onanuga, disclosed this while briefing State House correspondents in Abuja on Wednesday.

Mr Onanuga explained that since petrol has been deregulated, both companies are expected to work independently in a deregulated market.

“The Premium Motor Spirit (PMS) regime has been deregulated. Dangote is a private company. NNPC should not forget it’s a limited liability company. Whatever controversy both of them are having is their problem. They are operating, even if you go by the terms of the Petroleum Industry Act.

“NNPC is on its own, even though it’s owned by the federal government, the state government and local councils and everything, but it’s operating as a limited liability company. You can see what the private market has said that I think they find the NNPC or Dangote price too much for them. They will resolve to import fuel because they clear the market at the end of the day.

“It’s the consumer who benefits if a price war starts, if NNPC fuel is too much, the public market can go to the market and bring in their fuel and sell at the price that they think is very reasonable and profitable for them. So my answer is that, as far as this is concerned, the government is not dabbling into this controversy,” Mr Onanuga was quoted by Vanguard as saying.

He said Dangote, as a private company, is working on its own, NNPC is a limited liability company, and it has the right to fix the price.

Speaking further, Mr Onanuga said the federal government is promoting alternative energy solutions like Compressed Natural Gas (CNG) by subsidising conversion costs for vehicles.

He said the government wants to make sure that Nigerians have a choice.

“If you don’t want to use PMS, you can use CNG, and you can see what’s going on in some of our cities, Lagos, Ibadan, Benin and some other places where transporters are already embracing CNG. And the whole idea that CNG, the equivalent of gas to PMS, the gap is very wide. If you want to buy a litre of petrol, if they sell it, let’s say N850, what they are going to get by the equivalent of CNG is about N230 and you can see the gap,” he said.

According to him, some of the transporters are already converting their vehicles to CNG, noting that the government has a plan to make sure that about a million of those vehicles run on CNG.

“The whole idea is that if they run on CNG, the cost of transportation will go down,” he added.

He noted that the government also has a plan to make sure that private car owners can convert to CNG at a reduced cost.

“For transporters, it is almost free for them, but for private vehicle owners, the government has a plan to subsidise, I mean, the cost of converting the vehicle from petrol to CNG,” he said.

Mr Onanuga added that the administration is encouraging states to develop urban transportation systems to reduce overall transportation costs.

Dangote Refinery-NNPC Tango

Earlier in the month, Devakumar Edwin, vice president at Dangote Industries Limited, said the 650,000 barrels per day Dangote Refinery has begun the processing of petrol. Mr Edwin explained that NNPC Limited would buy its product exclusively.

On 13 September, the Nigerian government announced that petrol loading from the Dangote Refinery would begin on Sunday, 15 September.

The government said petrol from the Dangote refinery would only be sold to NNPC Ltd, which would then be sold to various marketers in the short term.

ALSO READ: NNPC insists it bought petrol from Dangote Refinery at N898 per litre

On 15 September, Mr Soneye told this newspaper that the refinery bought petrol from Dangote refinery at N898 per litre. He said market forces now determine domestic pump prices.

“For instance, now Brent is $70. Let’s say tomorrow, Brent goes to $80. You should note that the price will also rise because those are the market forces. But today, for this initial 16.8 million litre that was given to us, it was at the rate of N898,” Mr Soneye said.

In its reaction, the Dangote Refinery described the claim as “misleading and mischievous,” aimed at undermining the refinery’s achievement in addressing Nigeria’s energy insufficiency. However, the refinery failed to disclose the price it sold the product to NNPC Ltd.

In a counter-statement, the NNPC insisted it bought the product for N898 per litre and would be grateful for any discount from the Dangote refinery that could be passed 100 per cent to the general public.

“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 told PREMIUM TIMES at the time.

NNPC Ltd said apart from landing costs from refineries, suppliers must pay statutory and regulatory charges for each litre of petrol. Those charges include the NMDPRA fee, N8.99; inspection fee, N0.97; distribution cost (Lagos), N15.00; and profit margin, N26.48.

The state oil company said that once freight and other statutory costs are added; the product would cost more at the pump—N950.22 per litre in Lagos, N980.22 in Rivers, and N992.22 in Abuja. The selling price in Maiduguri was N1,019.