Dangote's Refinery Key to Fuel Pricing

Fuel Prices Leap After Subsidy Removable 

“We don't know the price of Dangote PMS. We are waiting for the refinery to release the price....”

NNPCL sets conditions for buying petrol from Dangote refinery, emphasizing willingness to purchase only at prices lower than international rates. Dangote Group awaits response, ready to proceed independently.

 

Oil marketers are worried about the delay in announcing the price of petrol from the Dangote Petroleum Refinery, as the current landing cost of imported petrol has surged to around N1,120 per litre.

Marketers fear that if the Dangote refinery sets a high price for its petrol, it could lead them to import the product themselves, taking advantage of the government's decision to liberalize the market and promote competition.

In July, the Major Energy Marketers Association of Nigeria (MEMAN) reported a petrol landing cost of N1,117 per litre, reflecting the expense of importing the product into Nigeria. At that time, pump prices ranged from N600 to N700 per litre.

However, last week, the Nigerian National Petroleum Company Limited (NNPCL) increased prices to between N855 and N897 per litre, with some independent dealers charging over N1,000 per litre.

The delayed announcement of the Dangote petrol price has prompted oil marketers to accelerate discussions with international partners about importing petrol, as of Monday, September 9.

IPMAN's National President, Abubakar Maigandi, confirmed talks with foreign partners, pending Dangote's petrol price, which could lead to massive PMS imports if set too high.

“I'll tell you the actual landing cost once we get the data from our foreign partners. So if the landing cost is cheaper than what the Dangote refinery will sell, then we will see how to bring in the product.

“You know, it is now an open market, so anywhere we see a cheaper rate with good quality, we will buy from there. We don't know the price of Dangote PMS. We are waiting for the refinery to release the price. However, we are discussing it with our foreign partners,” he said.

Abubakar Maigandi, IPMAN's National President, stressed that allowing multiple importers to bring in PMS would increase supply availability, promote competition, and create a more dynamic market.

"One advantage of allowing everyone to bring in the product is that there will be guaranteed availability of products.

“There is also going to be competition. Once this happens, everybody will try to see how they can sell their products and buy another one. It is only when you sell what you have that you can generate profit,” he stated.

A Dangote Group source, speaking on condition of anonymity, said Aliko Dangote aims to lower Nigeria's petrol prices. Dangote will supply petrol domestically, with or without NNPCL's involvement.

The representative, who declined to be named, confirmed Dangote's commitment to affordable petrol prices in Nigeria, with plans to supply the domestic market directly.

The source described Aliko Dangote as a patriotic businessman, dedicated to improving the lives of Nigerians. The refinery's previous diesel price cut from N1,600 to N950 per litre demonstrates his commitment to affordability.

The official praised Dangote's patriotism, noting the refinery's significant diesel price reduction, which later stabilized between N1,100 and N1,200 due to foreign exchange rate fluctuations.

“When we started diesel, the product was around N1,700. We crashed the price to N1,200 and later, N950, before it now hovers around N1,100 and N1,200. Those who were milking the nation with dirty diesel saw it and they reduced their cost too. We will do it again,” the source stated.

When asked if Dangote can still supply petrol domestically despite NNPCL's apparent hesitation, the source replied, “Absolutely! We plan to sell locally. Aliko Dangote is a proud Nigerian patriot, willing to make sacrifices for the nation's benefit.”

“We will bend for the country. We have high-quality PMS for the country. Some people who are importing fuel and some owners of refineries and blending plants in foreign countries don't want this to happen. Their $117bn shipping business to West Africa is at stake.”

The Dangote Group is still waiting for a response from NNPCL regarding a potential collaboration, but will make its own decision if the state-owned company declines to participate. The two parties have yet to agree on the terms for the sale of petrol produced by the Dangote refinery.

NNPCL's stance on purchasing petrol from Dangote refinery is clear: it will only buy if the price is lower than international market rates. This was stated by NNPCL's spokesman, Olufemi Soneye, in a release on September 7.

However, NNPCL's statement contradicts Aliko Dangote's earlier assertion that the refinery was awaiting NNPCL's greenlight to launch its product.

NNPCL clarified that Dangote and other domestic refineries are at liberty to sell their petrol directly to marketers under a willing buyer, willing seller arrangement. In a deregulated market, NNPCL has no intention of acting as a distributor for any entity.