NNPCL lacks power to fix fuel prices in Nigeria – Falana
Femi Falana, SAN, Chair of the Alliance on Surviving COVID-19 and Beyond (ASCAB), has stated that the Nigerian National Petroleum Company Limited (NNPCL) does not have the legal authority to set the price of petrol in Nigeria.
In a statement, Falana referred to remarks made on September 5, 2024, by the Executive Vice President of Downstream NNPC Ltd, Mr. Adedapo Segun, who explained that under Section 205 of the Petroleum Industry Act (PIA), NNPC Limited is established to operate in a deregulated market where petroleum prices are determined by free market forces.
Segun had said, “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.”
However, Falana pointed out that despite this claim, NNPCL set the price for fuel refined by Dangote Refinery and Petrochemical Company Limited last month, without allowing market forces to dictate the pricing.
Falana further noted that yesterday, NNPCL announced new pump prices for fuel refined by the Dangote Refinery, once again bypassing the mechanism of market forces in determining the cost.
According to Falana, these actions by NNPCL—fixing both imported and locally refined fuel prices—are illegal and void, as they violate Section 205 of the Petroleum Industry Act, which mandates that the prices of petroleum products be determined by market dynamics.
