Olabode Sowunmi: Dangote Refinery Should Be Transparent About Petrol Price

The Chairman of the Energy Transition Study Group of the Nigerian Gas Association, Olabode Sowunmi, has said that the Nigerian National Petroleum Company Limited (NNPC) and Dangote Refinery should be transparent about the real price of Dangote Refinery’s petrol.

Sowunmi said this in an interview with ARISE NEWS on Monday, where the Director of Corporate Accountability and Public Participation Africa (CAPPA), Akinbode Oluwafemi, also said that the NNPC and Dangote Refinery were hiding things from Nigerians concerning the actual price of Dangote Refinery, saying that the oil industry is “oily” and “opaque.”

Sowunmi, during his interview, said that part of the problems that is being faced with the pricing of Dangote Refinery’s petrol is the fact that issues surrounding this had made it seem to Nigerians that Dangote was going to provide a form of petrol subsidy to Nigerians.

He explained, “With respect to the Dangote refinery themselves and NNPC and the drama, part of the problem is also how the issues are being reported, because the issues are being reported in such a way that Nigerians expected that Dangote will provide a kind of subsidy. Because it doesn’t take too much experience to note that the price of the commodities which you can gauge globally, it has not significantly changed. What has changed is the naira to the dollar. And if subsidy were to be removed today and tomorrow, the naira to the dollar rate falls, and we are still selling it at the price of today, it means that that price, no matter how we feel, is being subsidised.

“So, those are facts of the matter that are not being properly interrogated. So as it is, there is a disconnect between the expectations of Nigerians in terms of reality, and players who are playing politics with the mind of Nigerians. People should not be confused at all, there is a price to petrol. Anybody selling it below that price, for them to sell it below that price, somebody somewhere is bearing that cost, It’s either the seller is giving a discount or the person that is doing the marketing is selling at a loss. But if there is no congress, no alignment between the actual cost of producing the product and the price with which they are selling it, there is somebody taking the cost. And if we are not expecting that reality, then we are putting our head in the stands.”

He then said that the NNPC and Dangote should be transparent about the petroleum pricing so that Nigerians could know what to expect as he said, “Business people will do business, and part of doing business is making profit. So, it is expected that whether it is NNPCL, which is now working as a limited liability, or Dangote Refinery, they will do business and they will make profit. It is incumbent upon them to save Nigerians from the drama and be more transparent in the thing so that we can make up our minds as to what is really happening among them.”

Also responding to this, CAPPA Director Oluwafemi said, “The biggest question that the Dangote Refinery has not answered is exactly what is the price of Dangote PMS at that refinery? How much is he selling to NNPC? Naira is a legal currency, Dollar is a legal currency, there is a daily government exchange rate. Even if you say you’re selling in dollar, at what exchange rate? And then you translate it into naira.

“What we need is the baseline- what is the exact cost of one litre of Dangote petrol at that refinery? And if you check all the statements that have come out of Dangote Refinery from Anthony Chiejina, none ever say exactly the price at the refinery. Let me remind us that when Dangote started pumping diesel, immediately they said our diesel is going to be N1100 per litre, we have dropped it now to N900 per litre. Why can’t we have that from Dangote? And then we can then go to NNPC and say, look, this is how much you’re buying, and this is how- how much, even at dollar, how much did Dangote Refinery sell it to NNPC, even in dollar. Then we can do the conversion and have an idea. Look, this is an opaque and oily business. There are things they are hiding from us- both the NNPC and Dangote Refinery, and Nigerian people are just in the middle.

“Corporations always give this impression that they’re doing us a favour- they’re a business, they want to make money. If there is no market, he won’t be doing this business, let’s get that part straight.”

Sowunmi then addressed the issues of Nigeria’s refineries still not working after the government had said that production would have started in Nigeria’s Port-Harcourt refinery by August, saying, “You see about the refinery, it is important, very important by everyone concerned that is a stakeholder, that more information is made available, more analysis of the issues are done so that people can make up their minds. This idea that the refinery can never work because its NNPC or that refinery will work for only 6 months and collapse does not do justice to Nigeria, Nigerians, and our future as a whole. So, it is incumbent upon us to know what is happening and do proper analysis.

“To the issue of the conflicting timelines, NNPC is faulty in that area, but I don’t speak for NNPC- I don’t work there, I have never worked there. So, it is incumbent upon them to check within their system to see why there’s such conflicting information. What I have said is a fact, and it is a fact that when you complete mechanical works, it takes a significant amount of time between the completion and production. This is science. It’s engineering. So, it doesn’t matter what anyone else says, those are facts of the matter. If NNPC is saying something contrary to what is science, it’s also incumbent upon all stakeholders, including the media, to dig into the fact of the matter and say this is what science says, and science seems to disagree with what they’re saying.”

“The truth of the matter is that the energy industry, particularly oil and gas, has been opaque for decades. So, there is a need and a pressure for them to change, which everyone is seeing, which is also at the foundation of the PIA. But culture change does not happen overnight, which is also important for it to be put in balance that the culture which is a rather, we could even call it a toxic culture, which has bedevilled us, is not going to change overnight, so there has to be clear expectations in terms of what we expect to happen there,” he added.

Ozioma Samuel-Ugwuezi

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