The Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refineries, a new entrant into the fuel market, both have drawn out their long knives. They are squaring up over what price Dangote should sell its refined fuel to the NNPC. The latter wants to buy in Naira but Dangote says you sold crude to us in dollars, so you must pay us in dollars. Dangote has a point there. The two parties have managed to clinch an agreement which allows the NNPC to pay for Dangote’s petrol in dollars for September and in Naira subsequently, beginning October.
However, this doesn’t appear to have ended the pricing palaver. The NNPC says it paid Dangote N898, the equivalent of the dollar value of a litre of petrol this September. Dangote has denied the claim but hasn’t said how much it got, understandably, because talks have not been finalized. We suspect this pricing war is only a veneer over a much deeper conflict of interest, much of it originating with the NNPC. Take, for instance, the decision to raise the price of petrol few days before the NNPC was due to take delivery of fuel from Dangote. This translated to the pump price increasing from an average of N650 to N900 a litre. It was an offhand attempt to force Dangote to sell at a price higher than it had planned. If, for example, Dangote had wanted to sell at, say, N600 and NNPC sold its imported product above that, it meant no independent marketer would buy NNPC’s fuel. Technically, the company would be out of business. What’s more, it says Dangote doesn’t want to tell the price of its petrol. That is not true, as we have found out. The truth is that the government that owns the NNPC has put a muzzle on Dangote just as it has been asked to not sell fuel directly to end users. The NNPC is being economical with the truth here and this it knows.
In this cat and mouse chase, it is obvious that the NNPC is playing the hand of some powerful “vested interests”. Take the case of Oando oil company (OVM). It recently acquired Agip Oil, effectively turning it to the sole controller of NNPC’s retail business, fuel sales inclusive. These influential interests are the ones pushing the NNPC to do what it is doing, helped along by some of the ‘ogas’ in the company. These same forces were believed to be behind the scheme to blend Russian crude in Malta, then ship the substandard finished fuel to the Nigerian market. The revelation was a big hit in August but now, inexplicably, the heat has cooled.
Unfortunately, trapped in this merry go round are hundreds of millions of hapless poor Nigerians. As an industry source has warned, “The ongoing price war between Dangote and NNPCL is not just a corporate spat; it speaks to a broader disconnect between the decision-makers in Nigeria’s oil industry and the millions of citizens who rely on fuel for their daily survival. It is increasingly clear that the economic challenges that everyday Nigerians face are not fully grasped by the leadership of these major oil corporations and government bodies.” We share this grave concern over the harm this conflict is doing to the greater good. Therefore, we join in the call for transparency in fuel pricing and greater clarity in the ongoing negotiations between the NNPC and Dangote Group to “ensure that Nigerians are not unduly burdened with high costs as the country navigates the post-subsidy economy.”
It is important that both Dangote Refineries and NNPC prioritize transparency and open communication with the public in order to address the growing confusion surrounding the pricing of petrol. With rumours circulating about the official fuel price reaching as high as N898 per liter, Nigerians are left in the dark about the true cost of this essential commodity. It is crucial for these major players in the oil industry to provide clear, accurate, and consistent information regarding fuel pricing, ensuring that the public understands how these prices are determined. The lack of transparency only serves to fuel speculation, mistrust and frustration. In a country where fuel prices directly impact the costs of living, the current uncertainty is contributing to heightened anxiety among the population. The constant shifts in pricing and the contradictory reports coming from Dangote Refineries and NNPC are, no doubt, raising the blood pressure of millions of Nigerians who are already struggling to make ends meet. If the goal is to stabilize the market and ease public concern, it is imperative that both entities engage in proactive communication. They must openly address these price rumours and offer concrete explanations for any changes in fuel pricing, instead of leaving the public to guess what is happening behind closed doors.
