The clarification came after speculations that NNPCL had overstepped its authority by taking over a core function of NMDPRA in setting prices.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has reacted to claims that the Nigerian National Petroleum Company Limited (NNPCL) in determining petrol prices for the Dangote Refinery.
The NMDPRA claimed the accusation is false.
Recall that NNPCL was accused of encroaching on NMDPRA's regulatory powers by determining the price petrol from Dangote's refinery is sold.
Speaking on the matter, NMDPRA’s Chief Executive Officer, Engr. Farouk Ahmed, stated that the pricing model follows the principles outlined in the Petroleum Industry Act (PIA) of 2021, which deregulates the sector.
According to Ahmed, petrol prices in the country are now determined by market forces, not by regulatory bodies, and the recent deal between NNPCL and the Dangote Refinery operates on a “willing buyer, willing seller” basis.
Addressing the concerns raised by industry stakeholders, Ahmed emphasized that NMDPRA’s role is to ensure no entity exploits the market or consumers.
He also explained that the pump price template issued by NNPCL, which recently pegged petrol prices at ₦950.22 per litre in Lagos and ₦1,019.22 per litre in Borno, was solely for NNPCL’s outlets, and other marketers are free to set their prices.
The clarification came after speculations that NNPCL had overstepped its authority by taking over a core function of NMDPRA in setting prices.
However, Ahmed downplayed the controversy, stressing that the NNPCL’s pricing was in line with the free-market system now in place, and not a regulatory imposition.
In a discussion with Daily Trust, Ahmed explained that the higher prices are due to supply constraints and the limited number of market participants.
He noted that with more entrants into the sector, pricing would stabilize, adding that expecting government regulation in a deregulated market would only lead to further challenges.
Ahmed said, “We try to restrain ourselves from needless controversy. But to put the record straight, the recent transaction between NNPCL and Dangote Refinery is strictly based on a willing buyer and a willing seller.
“But I know you will ask me that the supply is not sufficient in Nigeria, hence the high price. Of course, things would work fine when we have more players in the sector.
“But in a situation whereby some Nigerians expect us to regulate the price, it then means that the sector has not been deregulated; and it means we would continue to have problems.”