Oil Marketers Challenge Dangote Refinery’s Petrol Prices, Vow to Import Cheaper Alternatives
On Friday, oil marketers disclosed that the price of Premium Motor Spirit (PMS), commonly known as petrol, produced by the Dangote Petroleum Refinery ranges between N1,015 and N1,028 per litre, depending on purchase volume. These marketers have pledged to import petrol and offer it at prices below those from the Dangote refinery as well as the Nigerian National Petroleum Company Limited (NNPCL).
Recent data released by the Major Energies Marketers Association of Nigeria revealed that the landing cost of petrol stood at N978.01 per litre as of October 31, 2024. Additionally, the landing costs for diesel and aviation fuel were reported to be N1,069.97 and N1,119.67 per litre, respectively. The landing cost reflects the unit price at which imported products arrive on Nigeria’s shores.
Despite the commencement of domestic refined petroleum product supply by the Dangote refinery, the facility has not disclosed its pricing, despite repeated requests. A major marketer, who requested anonymity due to lack of authorization to comment, noted that the cost of petrol from Dangote is reportedly higher than that of imported PMS.
The insider stated, “Dangote sells to bulk buyers at N1,015 per litre, while smaller buyers are charged N1,028 per litre. However, imported PMS is more affordable than Dangote’s, which is likely why efforts are underway to curtail fuel imports.”
Amid this situation, marketers affiliated with the Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) have vowed to sell imported petrol at a price lower than that from the Dangote refinery and NNPCL. The association’s Publicity Secretary, Dr. Joseph Obele, indicated the higher pricing from Dangote might stem from the refinery utilizing imported crude purchased at elevated rates.
Obele elaborated that PETROAN has secured agreements with international fuel suppliers to import petrol at competitive rates, with estimates suggesting that the product could land in Nigeria at around N800 per litre. He stated, “We have established PETROAN Limited as a liability company and obtained a license from the Corporate Affairs Commission. We’re in the process of securing authorization from the NMDPRA to facilitate our import activities.”
According to Obele, while Dangote exclusively sells to NNPC, which subsequently sells to marketers, the pricing structure between the two remains undisclosed to the public. He pointed out the ongoing concerns regarding transparency in pricing negotiations between these entities.
In discussing the landing cost of N978 per litre, Obele noted that fluctuations are commonplace due to varying conditions in different countries. He clarified that while the landing cost was higher last month, the recent decrease in international crude oil prices should lead to a downward adjustment in petrol prices.
When asked about recent price hikes by the NNPC, he clarified that Dangote’s position as the only operational refinery in Nigeria complicates matters. The refinery is still processing previously purchased crude oil that was bought at higher prices, which delays any reduction in prices.
Meanwhile, Yakubu Suleiman of the Independent Petroleum Marketers Association of Nigeria corroborated reports that Dangote’s petrol pricing exceeds that of imported alternatives. He also expressed concerns regarding Dangote’s limited engagement with independent marketers, stating that this has hindered their ability to procure petrol directly from the facility.
Contacted for a comment, Tony Chiejina, Chief Corporate Communications Officer of the Dangote Group, dismissed the pricing claims as “fake news,” expressing disbelief at the circulation of such figures but refraining from disclosing the actual prices.
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