Nigerian marketers consider a direct partnership with Dangote Refinery as NNPC purchases petrol at ₦766 per litre, raising concerns over fuel pricing and supply strategies.
Critics of the Nigerian National Petroleum Corporation’s stronghold on the market have called for direct access to Premium Motor Spirit (petrol) from Dangote refinery, stating that marketers are demanding this.
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, has emphasized that adhering to its previous commitment toward willing buyers and sellers means ensuring equal market access.
Last Saturday, the NNPCL stated that it didn’t have exclusive rights to purchase products from the Dangote refinery. Additionally, they clarified that the refinery had full freedom to distribute its petrol to any marketer.
A week later, the Federal Government declared that no other buyer would be allowed to purchase petrol from the refinery except for this company.
During a press conference held in Abuja on Friday, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy stated that those who are interested in purchasing this product will have to procure it from the national oil firm via its trading company.
Dr Zacceus Adedeji, the Executive Chairman of the Federal Inland Revenue Service representing the minister, disclosed that on Sunday, Dangote refinery would begin supplying 25 million litres per day to fuel marketers.
According to him, “I am pleased to inform everyone that all agreements have been finalized. The first shipment of PMS will begin loading on Sunday, September 15th as previously indicated by NNPC. Additionally, starting from October 1st, Dangote Refinery shall be supplied crude oil by NNPC and paid for in naira.”
The Dangote refinery has agreed to provide PMS and diesel of similar worth as a trade-off, which the local market will purchase using naira. However, presently only NNPC can obtain PMS from them and then sell it to multiple suppliers.
Ukadike suggested liberalising the market in response.
According to him, “In accordance with the willing-buyer and willing-seller statements of NNPC, it must be accessible to all. We’re also considering how we can enhance our logistics and determine our pricing.”
The risks associated with establishing a new domestic monopoly in the oil and gas sector have been highlighted by Billy Gillis-Harry, who is also the National President of Nigeria’s Petroleum Products Retail Outlets Association.
“We have no information on the pricing of petrol, even though it will be available from Sunday. Gillis-Harry stated that we are unaware of any updates concerning government actions regarding this matter, including today being a Saturday.”
At present, the pricing templates and corresponding matrix remain unknown to us. Despite our requests for transparency from Dangote or those overseeing this transaction, we have yet to receive any such information.
Leaving the NNPC monopoly on importation and introducing it into the domestic environment may pose a risk to the industry.
Today, fuel was loaded into 300 trucks belonging to NNPC.
READ ALSO: 300 Trucks Set to Lift Petrol from Dangote Refinery on Sunday – NNPC
On Saturday, the NNPC disclosed that 300 trucks had been deployed to collect PMS from the Dangote refinery on the same day.
One of our correspondents was informed by Olufemi Soneye, the corporation’s spokesperson, that the mobilization of trucks to retrieve petrol from Lekki-based facility worth $20bn is based on an agreement made between both parties.
Soneye’s official handle post displayed a lineup of trucks at the refinery, indicating that NNPC Ltd vehicles had arrived for petrol loading scheduled on Sunday, September 15th. According to Soneye’s statement, there will be approximately 300 trucks present by Saturday evening stationed at the fuel loading gantry within Dangote Refinery compound.
The movement of trucks by the NNPC to load products has been confirmed by oil marketers. Additionally, they stated that PMS would also be loaded using vessels owned by the national oil company.
It was also mentioned that the cost of Dangote gasoline had not been disclosed and indicated that private marketers would solely procure it from NNPC at present.
According to Mustapha Zarma, the National Operations Controller of IPMAN, independent marketers have not received any offer from Dangote in order to establish the real off-take price.
“At present, independent marketers will be procuring the product from NNPC; however, it is anticipated that within a few weeks’ time we may acquire it directly from Dangote.”
Zarma observed that the Dangote refinery’s product would be transported by tankers and ships to coastal depots in Warri and Port Harcourt, where NNPC will take ownership of it.
Petrol from Dangote is priced at N766 per litre.
The NNPC would purchase petrol from the Dangote refinery at a price of N766.
Numerous insiders who work for the Federal Ministry of Petroleum Resources, NNPC, and top energy providers verified that the decision to provide crude oil to Dangote Refinery using naira currency played a pivotal role in determining PMS pricing.
The agreement between NNPC and Dangote is reminiscent of the previous arrangement, known as DSDP (Direct Sale of crude oil and Direct Purchase of petroleum products), which had been in place with foreign refineries.
According to a reliable source, who spoke on the condition of anonymity as they were not authorized to comment on the matter, Dangote’s petrol prices for NNPC have significantly improved, costing around N766/litre. However, it remains uncertain how much NNPC will sell their product to marketers at this time.
A second top advisor to President Bola Tinubu, speaking anonymously, corroborated that the cost of petrol would be 766/litre.
There is a possibility of the pump price decreasing.
In response to the Dangote fuel price, an official representing IPMAN’s top tier stated that in order for marketers to break even with a purchase cost of N766, they must factor in expenses such as transportation fees and additional margins.
“We can sell at N790 in Lagos, but because of the distance in the far north, it may be priced higher around N820 per litre,” he stated while emphasizing on a give-and-take approach.
Gillis-Harry acknowledged that his group was unaware of the fuel price from the Dangote refinery.
If we can get it at N766 per litre, that would be more economical for us as our current payment to NNPC is N870. Therefore, the reduced price of N766 will definitely be acceptable and preferable for purchase.
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Determining the quantity of our sales to Nigerians is not feasible at this point. Our team will calculate the retail price after much discussion and negotiation, as it isn’t solely up to individuals or organizations to set a price. We’ll collaborate on determining an appropriate value for our product.
He added that although they are prepared to assist Dangote, there has been a lack of communication from their end. He emphasized that his management oversees more than 6,000 retail establishments – making them vital partners for Dangote – but unfortunately no talks have occurred yet.
