Cheaper Imports: Oil Marketers Shun Dangote Refinery Petrol

Oil Marketers Opt for Cheaper Imports Over Dangote

Nigeria's Fuel Conundrum - Dangote's Refinery Capacity meets resistance from Importers...

Dangote Refinery vs Importers: Marketers Claim Cheaper Fuel Imports Despite 30M Daily Capacity

Tensions escalate between Dangote Refinery and Nigerian petroleum marketers, as the latter claim importing petroleum products is now cheaper than buying from Dangote. This assertion contradicts Aliko Dangote's statement that marketers haven't approached his refinery for fuel purchases.

The controversy follows the September launch of premium motor spirit (PMS) at Dangote Refinery. Despite initial hopes for reduced fuel prices, Nigerians witnessed a price surge, fueling disappointment. Marketers' decision to import petroleum products underscores the refinery's struggles to meet domestic demand at competitive prices.

The dispute between Dangote Refinery and Nigerian petroleum marketers has escalated. Oil marketers claim that importing petroleum products is now more economical than buying from Dangote's refinery, contrary to Aliko Dangote's assertion that marketers haven't approached the refinery for fuel purchases.

Dangote Refinery launched premium motor spirit (PMS) in September, but instead of the anticipated price drop, fuel prices increased, leaving Nigerians disappointed. This development has led marketers to favor imports over local purchases from the refinery.

Dangote Refinery is gearing up to supply Nigeria's fuel needs, with a daily capacity of over 30 million liters and a reserve of 500 million liters, sufficient for 12 days. Following a meeting with President Bola Tinubu, Aliko Dangote expressed confidence in meeting national demand. However, his comments sparked reactions from marketers who are eager to purchase from the refinery, but only if prices are competitive.

Independent and major marketers emphasized their willingness to buy from Dangote Refinery, provided the pricing is right. Currently, they claim that Dangote's fuel price exceeds that of imported fuel, making imports the cheaper option. This contradicts Dangote's earlier statement that his refinery's petrol is sold below import cost. The Nigerian National Petroleum Company (NNPC) Limited had announced a uniform price for both Dangote's refined petrol and imported fuel, potentially obscuring the price difference.

Points of Contention:

• Competitive Pricing: Marketers seek affodable prices from Dangote Refinery.
• Price Comparison: Dangote's fuel price versus imported fuel.
• National Demand: Dangote Refinery's capacity to meet Nigeria's fuel needs.

The Federal Government's decision to allow Dangote Refinery to set its petrol prices may significantly impact the fuel pricing structure in Nigeria. As the situation unfolds, stakeholders will be watching closely to see how Dangote Refinery's pricing strategy affects the market.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) concurred, citing restricted access to Dangote's products due to an exclusive contract with the Nigerian National Petroleum Company Limited (NNPCL). This agreement limits IPMAN members' ability to purchase from Dangote Refinery.

The Major Energy Marketers Association of Nigeria (MEMAN) echoed the call for competitive pricing, emphasizing the benefits of locally refined fuel. As Dangote Refinery operates in naira, MEMAN argues that production costs should be shielded from foreign exchange fluctuations, enabling affordable prices.

Despite the pricing dispute, Dangote Group's Chief Branding Officer celebrated local refining as a milestone for Nigeria. Decades of reliance on imported fuel may soon end, thanks to Dangote Refinery's capacity.

This impasse highlights persistent challenges in Nigeria's petroleum sector. As the industry navigates deregulation, stakeholders face complex pricing and distribution issues. The refinery and marketers must find mutually beneficial solutions to unlock the full potential of local refining.