Oil Marketers Concerned Over Delay in Dangote Petrol Pricing

Oil marketers are expressing concern over the delay in announcing the price of Premium Motor Spirit (PMS) from the Dangote Petroleum Refinery. They point out that the landing cost of imported PMS is currently around N1,120 per litre.

Delay in Dangote Petrol Pricing

Dealers are worried that a high price from the Dangote refinery might lead to increased imports by marketers, as the government has opened up the market for competition. In July, the Major Energies Marketers Association of Nigeria reported that the landing cost of PMS was N1,117 per litre. This cost reflects the price at which the commodity arrives in Nigeria.

Currently, pump prices for petrol vary between N600 and N700 per litre, but the Nigerian National Petroleum Company Limited (NNPC) recently raised prices to between N855 and N897 per litre. Some independent dealers have even increased their prices to over N1,000 per litre.

Impact on Oil Marketers

The delay in announcing Dangote’s petrol price has prompted oil marketers to intensify discussions with their foreign partners to begin importing petrol. Abubakar Maigandi, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), stated that the association is waiting for Dangote’s price before finalizing import plans. “We are waiting for our foreign partners to calculate the cost of bringing the product to Nigeria. If the landing cost is cheaper than Dangote’s price, we will import the commodity,” Maigandi explained.

He added that opening up the market to multiple importers would ensure better availability and foster competition, benefiting consumers. “Allowing everyone to bring in the product guarantees availability and encourages competition,” he said.

Dangote’s Commitment to Competitive Pricing

An official from the Dangote Group, who wished to remain anonymous, assured that Alhaji Aliko Dangote is committed to lowering petrol prices. The official emphasized that Dangote would sell PMS locally regardless of whether the NNPC agrees to be its off-taker. “Alhaji Dangote is ready to make sacrifices for the nation. We will sell locally and ensure the price is competitive,” the official said.

The official also recounted how Dangote previously reduced diesel prices significantly, stating, “When we started with diesel, we brought the price down from around N1,600 to N950, before it began to hover around N1,100 and N1,200 due to currency fluctuations. We aim to achieve similar results with petrol.”

NNPC’s Position on Dangote Petrol

The NNPC has stated that it will only purchase Dangote’s PMS if it is cheaper than international market prices. Olufemi Soneye, the NNPC spokesman, noted, “We will not buy Dangote PMS unless it is more affordable than international prices. Domestic refineries are free to sell directly to marketers on a willing buyer, willing seller basis.” He added that the NNPC is not seeking to become a distributor but is open to competitive pricing from domestic refineries.

Soneye further indicated that if current PMS prices are perceived as high, this could provide an opportunity for the Dangote refinery to offer lower prices. “There is no guarantee that domestic refining will always be cheaper compared to global prices. If Dangote finds the current prices high, they can adjust accordingly,” he said.

The NNPC and the Dangote refinery have yet to finalize the terms for the sale of Dangote’s PMS. Alhaji Dangote has previously stated that the refinery would start supplying petrol as soon as arrangements with the NNPC are completed. “Once the NNPC is ready, we will roll out the petrol,” Dangote affirmed.

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