By Blessing Ugo
The enthusiasm that greeted the flag-off of sales of premium motor spirit (PMS), otherwise known as petrol, by Dangote Refinery to the Nigerian National Petroleum Corporation Limited, NNPCL, on Sunday, September 15, 2024, waned a little hours after that historic landmark was achieved as both companies disagreed openly over pricing.
The NNPCL had, at about 1.40 a.m. on Monday, released the estimated estimate prices of petrol at its retail stations across the country, as it obtained from Dangote Refinery.
In a press statement issued by the company’s Chief Corporate Communications Officer, Olufemi Soneye, NNPCL not only said it got its supply at N898/litre, but also confirmed that it was “paying Dangote Refinery in USD for September 2024 PMS offtake, as Naira transactions will only commence on October 1st, 2024.”
“The NNPC Ltd also wishes to state that, in line with the provisions of the Petroleum Industry Act (PIA), PMS prices are not set by Government, but negotiated directly between parties on an arms length,” NNPCL said in the release.
The company attached to the press statement the estimated pump prices of PMS (obtained from the Dangote Refinery) across NNPC Retail Stations the country, based on September 2024 pricing.
It then assured that if anyone doubted the quoted pricing, it would make the difference available to consumers.
Soneye, in the interview, said the NNPC Ltd “will be grateful for any discount from the Dangote Refinery, which will be passed on 100% to the general public.”
Soneye was not done. He also restated that market forces would henceforth determine the pump price of petrol.
In an interview with Premium Times, he said: “What you need to understand is that it’s market forces that determine the price. For instance, now Brent is $70. Let’s say tomorrow now, Brent goes to $80, you should note that the price will also increase because those are the market forces.
“But today, for this initial 16.8 million litre(s) that was given to us, it was at the rate of N898.”
Dangote Refinery took the challenge and disputed the claim by Soneye that it sold petrol to NNPCL at N898/litre.
In a counter release, Anthony Chiejina, Group Chief Branding and Communications Officer of Dangote Group, categorically disputed the NNPC Ltd’s claim but did not disclose the price at which it sold the product to NNPC Ltd.
In the release, Dangote Refinery not only described the claim as “misleading and mischievous”, it also declared that it was aimed at undermining the refinery’s gargantuan efforts at helping Nigeria and Nigerians to attain energy insufficiency.
The refinery, through Chiejina, implored Nigerians to thrash what it called the “malicious statement” and await a formal announcement on the pricing by the Technical Sub-Committee on Naira-based crude sales to local refineries.
The committee was appointed by President Bola Ahmed Tinubu, months ago, at the height of a similar spar between Dangote Refinery and the NNPC Ltd. The committee had stated at the time that sales of crude to local refineries in naira will start on October 1, 2024.
Dangote Refinery, in the release, noted that its current stock of crude was procured in dollars and sold to the NNPC Ltd in dollars, resulting in significant savings compared to current imports.
Here is the statement by Dangote Refinery:
“Our attention has been drawn to a statement attributed to NNPCL spokesperson, Olufemi Soneye, that we sell our PMS at N898 per litre to the NNPCL. This statement is both misleading and mischievous, deliberately aimed at undermining the milestone achievement recorded today, September 15, 2024, towards addressing energy insufficiency and insecurity, which has bedeviled the economy in the past 50 years.
“We urge Nigerians to disregard this malicious statement and await a formal announcement on the pricing, by the Technical Sub-Committee on Naira-based crude sales to local refineries, appointed by His Excellency, President Bola Ahmed Tinubu GCFR, which will commence on October 1, 2024, bearing in mind that our current stock of crude was procured in dollars.
“It should also be noted that we sold the products to NNPCL in dollars with a lot of savings against what they are currently importing. With this action, there will be petrol in every local government area of the country regardless of their remote nature. We assure Nigerians of availability of quality petroleum products and putting an end to the endemic fuel scarcity in the country.”
History was made on Monday, January 8, 2024, when Dangote Refinery began its test-runs after the plant received its sixth crude oil cargo of one million barrels of Nigeria’s Agbami crude. That amount brought the total volume received since December 2023 to six million barrels.
Nigerians were enveloped in a rapture of joy as they envisaged that with Dangote Refinery running well and achieving optimum production capacity in good time, the backbone of cartels that have been holding Nigeria’s energy sector by the jugular would be shattered.
Little did they know that some entrenched interests will fight back. And a bitter controversy between the refinery and the NNPC Ltd over equity and crude oil procurement began. The fight got so bitter that Dangote Refinery began to import its crude from abroad. At the peak of his frustration, Alhaji Aliko Dangote told the world that he was ready to sell his shares of the refinery to whoever cared to buy.
Running side-by-side with that was another war by some marketing majors who felt threatened that Dangote Refinery could not give Nigerians petrol at cheaper pump price, adding that Dangote was only scheming to establish a monopoly on that sector of the economy.
Passage of time smothered the tension and expectations of Nigerians began to soar again. It reached a euphoric notch last Friday when the Minister of Finance and Supervising Minister of the Economy, Mr. Wale Edun, announced that Dangote Refinery would start distribution of its petrol from Sunday, September 15, 2024, but selling solely to the NNPC Ltd.
Truly, the supply began on Sunday as scheduled but the two companies-Dangote and NNPC Ltd- began to spar over the actual price the product was sold to the national oil company.
While the NNPC Ltd claimed Dangote Refinery sold the product to it at N898/litre, the refinery disputed it but failed to disclose the actual price it dispensed the product.
Though the price war threw a dampener to the spirit of Nigerians who had thought the significant milestone by Dangote Refinery would solve their energy problem, their initial optimism is still high even as they pray the whole confusion would be resolved in their favour, having been suffering excruciating pain under the Tinubu Administration’s reforms.