The price of Premium Motor Spirit (PMS), commonly known as petrol, produced by the Dangote Petroleum Refinery and released by the Nigerian National Petroleum Company Limited (NNPC) may prompt a rise in fuel importation, oil marketers have indicated.
Marketers expect vessels carrying imported petrol to start arriving in Nigeria today (Tuesday) and have called for greater transparency in the pricing of PMS from the Dangote refinery.
Meanwhile, the Organised Private Sector has criticized NNPC’s role as the sole off-taker of petrol from the $20 billion Lekki refinery, stating that such exclusivity stifles competition. They argue that competition is crucial to fostering a healthy market.
On Monday, NNPC announced that petrol from the Dangote refinery would be sold at prices exceeding N1,000 per litre in northern regions, with Borno State seeing prices as high as N1,019 per litre and Abuja, Sokoto, and Kano at around N999 per litre. In southern states like Oyo and Rivers, prices would be N960 per litre, while Lagos and its environs would have the lowest price at N950 per litre.
In a statement, NNPC spokesperson Olufemi Soneye clarified that PMS prices are determined through negotiations, not by the government, in line with the Petroleum Industry Act (PIA). He also disclosed that the petrol lifted from the Dangote refinery in September was paid for in US dollars, with naira transactions expected to begin on October 1, 2024.
Soneye added that NNPC welcomes any discounts from the Dangote refinery, assuring that such reductions would be passed on to consumers.
This follows a disagreement between NNPC and the Dangote Group over the cost of PMS, with NNPC previously announcing a price of N898 per litre, which Dangote disputed.
Petrol Importation Concerns
Major oil marketers have voiced concerns that the high price of Dangote-produced petrol could lead to increased importation, as PMS vessels are expected to start arriving in Nigeria from today.
A major marketer, speaking anonymously, highlighted potential issues with transparency in product allocation from the Dangote refinery and warned that some large companies might not receive sufficient quantities of PMS, prompting them to rely on imports.
The source also predicted that prices could vary widely, with some stations selling petrol for as high as N1,200 per litre. This price disparity would create a market for imported fuel, with consumers opting for either cheaper or more convenient options depending on their circumstances.
IPMAN’s Response
The Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed concerns over the pricing of locally produced petrol. IPMAN urged NNPC to ensure that Dangote’s petrol does not exceed the cost of imported products, stating that such a scenario would undermine the country’s goal of achieving energy self-sufficiency.
IPMAN emphasized that the pricing strategy for domestically refined petrol should reflect the benefits of local production, offering consumers more affordable fuel options. Maintaining competitive pricing is essential for the success of the Dangote refinery and the sustainability of Nigeria’s fuel market, the association argued.
IPMAN’s National Welfare Officer, John Kekeocha, stressed on Channels Television that selling Dangote’s petrol at a higher price than imported fuel would defeat the purpose of local refining efforts. He questioned the benefits of the refinery if imported fuel remains cheaper for consumers.
Credit: PUNCH.
