Africa (Commonwealth Union) _ The Nigerian Presidency has clarified why government agencies cannot intervene in the ongoing price dispute between the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery. Both companies, although operating in critical sectors, are private entities in a deregulated market, according to the Special Adviser to the President on Information and Strategy, Bayo Onanuga.
During a press briefing, Onanuga reinforced the Minister for Petroleum Resources, Senator Heineken Lokpobiri’s remarks, emphasizing that the government no longer sets fuel prices due to deregulation. Lokpobiri noted that while petrol prices may vary by location, increased availability of products would eventually stabilize costs. “The government is not fixing prices. This sector is deregulated. With availability, the price will find its level,” he explained, urging Nigerians not to engage in panic buying.
Onanuga echoed this sentiment, emphasizing that both NNPCL and Dangote operate independently under the Petroleum Industry Act (PIA), which grants NNPCL autonomy despite its government ownership. He remarked, “NNPCL functions as a limited liability company, even though it is owned by various levels of government. Any controversy between NNPCL and Dangote is their problem, and the market will decide the outcome.”
The advisor also touched on the dynamics of the deregulated market, where competition among private players could lead to a price war that ultimately benefits consumers. “If NNPCL’s prices are too high, private marketers can import fuel and sell at a more reasonable rate,” Onanuga noted.
Rather than intervening in the price dispute, the government plans to focus on promoting alternative energy sources, particularly Compressed Natural Gas (CNG). Onanuga highlighted that CNG presents a much cheaper option for consumers, costing around N230 per liter compared to the current Premium Motor Spirit (PMS) price of about N855 per liter. To make this transition smoother, the government is considering subsidizing the cost of converting vehicles to CNG usage.
With deregulation in place, the fuel market is expected to balance itself through competition, and consumers will likely benefit from the variety of pricing options offered by different fuel suppliers. Meanwhile, the government’s push toward alternative energy solutions signal a broader strategy for reducing dependence on traditional fuels.
