The Nigerian National Petroleum Company Limited (NNPC Ltd) has reiterated that it lacks regulatory powers to fix the price of the Premium Motor Spirit (PMS), commonly known as petrol, but market forces.
Executive Vice President, Downstream at the NNPC Ltd, Adedapo Segun restated this during a meeting with some senior media practitioners in Lagos State.
The EVP noted that NNPC Ltd. is no longer a regulator in the oil and gas market, but a business entity like others, therefore, cannot set the price of the petrol but that market forces would determine the price.
He stressed that even though an agreement has been signed with the Dangote refinery, the price would be determined by market forces.
“NNPC is not a regulator. NNPC has no regulatory powers, so we can’t say NNPC sets the price, and definitely government is not involved. It is basically the market forces that set the price.
“Dangote says this is how much we want for it, but we told them that if we go out, we will get at this much. So, we won’t pay you that much for it. So we go into negotiation. And that negotiation took us weeks to complete. At the end of the day, we were able to reach an agreement on the price to pay for it,” he said.
He noted that the naira for the crude deal of the Federal Government is merely a payment solution and would not influence the price of the product.
“The transaction is going to be in the natural currency, the US Dollar. Payment now will be done in Naira. Refinery will get the crude at $80, so when payment is due, it will be converted on that due date to Naira, and it will be paid in Naira.
“Marketers, of which NNPC is one, go to the refinery and buy products in bulk in dollars. If that payment is due, instead of NNPC going to chase the dollars in the market, NNPC pays for that product in Naira. So that is what it is; it is a simple payment solution, no more, no less,” he explained.
Meanwhile, TheFact Daily gathered that the NNPC Ltd. bought the petrol from the Dangote refinery at a price of N898 per litre.
