Oil Marketers Set Conditions for Patronizing Rehabilitated Port Harcourt Refinery

Oil Marketers Give Ultimatum to FG on Rehabilitated Port Harcourt Refinery

The existing price gap has created unease among marketers, prompting some to consider importing petrol as...

Oil marketers are cautious about patronizing NNPCL's Port Harcourt refinery, citing the need for competitive pricing. The refinery's rehabilitation marks a significant step in Nigeria's quest for energy self-sufficiency.

Oil marketers have set specific conditions for patronizing the newly rehabilitated Port Harcourt Refinery Company, managed by the Nigerian National Petroleum Company Limited (NNPCL). The refinery, located in Rivers State, resumed operations on November 26, 2024, after years of inactivity, and currently operates at 70% of its installed capacity.

To gain the support of oil marketers, the refinery must offer refined petroleum products at competitive prices. Specifically, marketers are demanding that the refinery sell products at prices lower than those of the Dangote Refinery. Currently, Dangote Refinery sells petrol at N970 per liter, while imported petrol is priced similarly. In contrast, the NNPCL sells petrol at around N1,045 per liter, which marketers consider uncompetitive.

The rehabilitated Port Harcourt Refinery Company has commenced production of various petroleum products, including diesel, low-pour fuel oil, naphtha (blended into Premium Motor Spirit, commonly known as petrol), and kerosene. With a daily petrol production capacity of 1.4 million litres, the refinery aims to significantly contribute to meeting the country's fuel demands.

To ensure efficient distribution, approximately 200 petrol trucks are expected to be dispatched to the market daily. This development is expected to boost the supply of petroleum products in the country. However, despite these positive developments, concerns persist among marketers regarding the refinery's pricing strategy.

The Nigerian National Petroleum Company Limited (NNPCL) is yet to announce its official prices for products from the Port Harcourt refinery. Currently, the company's stock originates from the Dangote Refinery, including associated fees and levies. As a result, NNPCL's pricing strategy for its own refinery products remains uncertain.

According to Olufemi Soneye, NNPCL's spokesperson, the company has not commenced bulk sales to marketers nor opened its purchasing portal. Presently, refined products from the Port Harcourt refinery are exclusively available at NNPCL retail stations. This limited availability has sparked concerns among marketers, who are eager to know the company's pricing strategy.

Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), emphasized that marketers would only purchase products from NNPCL if the prices are more competitive than those offered by Dangote or other sources. This stance underscores the need for NNPCL to adopt a pricing strategy that attracts marketers and supports the growth of the downstream sector.

Chinedu Ukadike, IPMAN's National Publicity Secretary, expressed optimism that NNPCL might review its prices downward, aligning with global price trends. This potential adjustment could alleviate the concerns of marketers, who are currently hesitant to purchase from the Port Harcourt refinery due to the pricing disparity.

The existing price gap has created unease among marketers, prompting some to consider importing petrol as a more viable option. Recent data illustrates the readiness of marketers to pivot toward importation if local pricing fails to ensure profitability. Between November 23 and November 28, oil marketers imported approximately 105.67 million litres of petrol, equivalent to 78,800 metric tonnes.

Conflicting reports have emerged regarding the pricing of petroleum products by the Nigerian National Petroleum Company Limited (NNPCL). Dr. Joseph Obele, National Public Relations Officer of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), claimed that NNPCL's petrol is priced N75 higher than Dangote's. However, this assertion was promptly refuted by Billy Gillis-Harry, President of PETROAN.

Gillis-Harry clarified that marketers are currently purchasing products based on the old pricing structure, as they await updated rates from NNPCL. This ambiguity has left oil marketers cautious, emphasizing that competitive pricing will be the decisive factor in their decision to patronize NNPCL's Port Harcourt refinery. The lack of pricing clarity and assurances of cost-effectiveness may lead the market to favor imported fuel, undermining the rehabilitation efforts of the Port Harcourt Refinery Company.