Human rights lawyer, Femi Falana (SAN), has criticized the decision of the Nigerian National Petroleum Company Limited (NNPCL) to determine the price of petrol coming from the Dangote Refinery.

In a statement issued on Tuesday, the Senior Advocate of Nigeria said such action is a gross violation of the Petroleum Industry Act (PIA).

According to him, it is illegal for the NNPCL to determine the price of petrol in the country after the government has deregulated the sector and announced that market forces would be responsible for the determination of fuel prices in the country.

Falana also argued that the ₦950 minimum price per litre set by the NNPCL for petrol from Dangote Refinery is not justifiable, and it is an act of sabotage for the national oil company to sell petrol from the refinery at prices higher than the imported ones.

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He said, “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.

According to him, “The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices.”

‘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.”

The lawyer added that it is wrong for the NNPCL to justify the high cost by stating it bought fuel in dollars from Dangote Refinery when the government had approved that both parties should deal in naira.

He said: “Furthermore, since the petrol sold by Dangote is not imported into the country but produced at the Lekki Economic Free Trade Zone, the NNPCL can not 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.

“In fact, by selling the petrol produced by Dangote Refinery at a higher price, the NNPCL has confirmed its resolve to continue to sabotage the national economy through the reckless importation of cheaper petrol from foreign countries at a cost that the nation cannot afford.

“The NNPCL has justified the hike by saying that petrol is sold in dollars by the Dangote Refinery. Why should the NNPCL buy petrol in dollars since the Federal Executive Council (FEC) has directed that crude oil be sold to Dangote Refinery in Naira?

“Are the management staff of NNPCL and Dangote Refinery not aware that it is a criminal offence under section 20 of the Central Bank Act to refuse to accept the naira as a means of payment for any transaction in the country?

Falana also criticized the move by the NNPC as the sole buyer of petrol from Dangote Refinery, arguing that other marketers should be given direct access.

He called on the Federal Competition and Consumer Protection Commission (FCCPC) to check the monopolistic tendencies of the NNPC.

“Furthermore, the exclusive purchase of petrol from Dangote Refinery by the NNPCL is completely at variance with the letter and spirit of section 205 of the PIA.

“Therefore, other marketers should be at liberty to purchase petrol directly from Dangote Refinery and distribute to outlets in all the states of the Federation.

“Henceforth, the Federal Competition and Consumer Protection Commission should stop the NNPCL from exercising monopolistic control of the petrol produced by Dangote Refinery,” Falana said.

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