Oil Marketers Debunk Dangote Refinery's Affordable Fuel Promise
Dangote Refinery's True Intent
“We cannot question the Dangote price because we are in a deregulation regime...”
Nigeria's oil politics heat up as Dangote Refinery's launch fails to ease fuel prices, sparking tensions with NNPCL and oil marketers. Will Dangote's dominance stifle competition or bring relief to consumers?
The Dangote refinery, valued at $20 billion, is not intended to reduce petrol prices, according to petroleum marketers. This clarification came after the company released its price template on Sunday, November 3.
Billy Gillis-Harry, President of PETROAN (Petroleum Products Retail Outlets Owners Association of Nigeria), and Abubakar Maigandi, National President of IPMAN (Independent Petroleum Marketers Association of Nigeria), issued a joint statement on Tuesday, November 5. They emphasized that the Dangote refinery's primary objective is not to provide cheaper petrol, contrary to public expectations.
The marketers' statement seeks to manage public expectations regarding the refinery's impact on fuel prices. The Dangote Group's price template has sparked discussions about the potential effects on Nigeria's petroleum market.
Dangote Group's spokesperson, Anthony Chiejina, revealed that the refinery has set its petrol prices at N960 per litre for ships and N990 per litre for trucks. This announcement comes months after the refinery began fuel distribution on September 15, 2024.
According to the Major Energies Marketers Association of Nigeria (MEMAN), the landing cost for imported petrol stood at N978 per litre as of October 31, 2024.
MEMAN's National Secretary, Gillis-Harry, expressed concerns that the price difference between Dangote Petrol (N990/litre) and the Nigerian National Petroleum Company's rate (N1,025/litre) is negligible, making it unlikely to discourage fuel importation.
Gillis-Harry emphasized that if Dangote Refinery truly aimed to benefit Nigerians, its locally produced petrol would be priced more competitively than imported alternatives, highlighting the need for a more significant price differential to make an impact.
“As it is now, we cannot tell how much Dangote Petrol will sell when it finally lands across states with his current price template of N990 per litre (to trucks),” he said.
Billy Gillis-Harry stressed that Dangote Refinery should explore direct petrol sales to Independent Petroleum Marketers Association of Nigeria (IPMAN) members, potentially reducing costs.
Abubakar Maigandi, IPMAN's National President, reiterated that the association's top priority is securing direct petrol supply from Dangote Refinery. This strategic move aims to minimize distribution costs and ultimately lower fuel prices for consumers at IPMAN's retail outlets across Nigeria.
By cutting out intermediaries and streamlining the supply chain, IPMAN seeks to:
- Reduce fuel prices
- Enhance operational efficiency
- Increase competitiveness
- Benefit consumers nationwide
This collaboration could pave the way for a more efficient and cost-effective fuel distribution network in Nigeria.
“Maybe Dangote is not being properly briefed about IPMAN. In the oil industry, anyone who says he wants to fight with IPMAN will not succeed because we have 85 percent of filling stations in Nigeria.
“We cannot question the Dangote price because we are in a deregulation regime. What we are advocating is to buy petrol directly from Dangote refinery so we can sell at a cheaper rate than what we currently sell to Nigerians,” he said.
Nigerians are frustrated with skyrocketing fuel prices and the subsequent increase in costs for goods and services nationwide. This frustration boiled over on Monday, November 4, when protesters gathered at the Nigerian National Petroleum Company Limited (NNPCL) headquarters in Abuja, demanding the removal of Group Chief Executive Officer Mele Kyari. The protesters, led by civil society organizations, criticized Kyari's leadership as incompetent, citing endless fuel queues, economic hardship, and the importation of substandard fuel.
Protesters' Demands:
Immediate Resignation of Mele Kyari: Protesters want Kyari to step down due to his alleged inability to address the fuel crisis.
Transparency and Accountability: They demand transparency in the oil sector, including the importation and distribution of fuel.
End to Fuel Queues: Protesters want an end to the persistent fuel shortages and long queues at gas stations.
Lower Fuel Prices: They call for lower fuel prices to alleviate the economic burden on Nigerians.
The NNPCL spokesperson, Femi Soneye, responded to the protests, stating that the protesters lack understanding of the sector and that Kyari ensured Nigerians had access to fuel at N620 per liter for over a year, despite higher landing costs. However, the protesters argue that Kyari's leadership has failed to address the root causes of the fuel crisis and demand change.
NNPCL retail stations currently sell petrol at varying prices, ranging from N1,025 to N1,060, while other fuel stations nationwide charge between N1,115 and N1,300 per litre. This price disparity comes as IPMAN explores alternative, affordable petrol sources for Nigerians due to rising ex-depot prices for Dangote Petrol, announced on November 1.
Fuel Price Hike Background
In September, following Dangote Petrol's launch, NNPCL increased fuel prices, which have since risen to the current range of N1,025 to N1,300 per litre. Notably, Dangote initially took NNPCL and other marketers to court, challenging their import licenses due to continued fuel importation despite local production. However, Dangote later declared the case moot.
Current Fuel Prices
NNPCL Retail Stations: N1,025 - N1,060 per litre
Other Fuel Stations: N1,115 - N1,300 per litre
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