Petroleum marketers are concerned that the petrol price from the Dangote refinery may be higher than anticipated, as it’s expected to hit the market two weeks from now.
This follows the difficulty in sourcing crude locally from the international oil companies by Dangote Refinery.
It continues to buy crude oil from the United States and other countries at a higher cost. This change has made its diesel and aviation fuel less appealing to some local marketers due to price considerations.
This was disclosed by the Marketers on Monday, according to The PUNCH.
The marketers expressed concern that the cost of importing crude oil will affect the cost of production, thereby raising the ex-depot price of the Dangote PMS.
The Chairman of the Dangote Group, Aliko Dangote, had said PMS from the refinery will hit the Nigerian market by the third week of July.
Marketers and Nigerians have hoped that the Dangote refinery will reduce the price of PMS, which has risen from roughly N200/litre to more than N600/litre since President Bola Tinubu removed gasoline subsidies on May 29, 2023.
However, stakeholders are concerned that Dangote’s lack of access to local crude oil may kill Nigerians’ hopes of receiving cheaper PMS.
Commenting on this development, the National Vice President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola stated that the association was concerned that crude imports would drive up the price of Dangote petrol.
According to Fashola, the IOCs’ unwillingness to sell crude oil to Dangote will pose a significant hurdle to the $20 billion refinery, even though IOCs have other commercial commitments.
“The non-supply of crude is a big challenge for Dangote. You know Dangote cried out too. The international oil companies too will have their reasons; you know they have their commitments too. It’s not like they will start feeding Dangote only. People should understand that. I think Dangote should consider that. I know this prompted Dangote to go outside the soil of Nigeria to seek crude oil. You know when he keeps bringing crude oil from the United States, that is another cost. That is another problem we are scared of because it will still boil down to the high cost of petrol, unlike where he can source the crude locally in Nigeria,” Fashola said.
To overcome this, the IPMAN leader requested that the Federal Government aid Dangote with the supply of crude oil. This, he claimed, would solve Nigerians’ issues with fuel availability and affordability.
“I will advise that the government should assist Dangote in the supply of crude oil. If Dangote can get an adequate supply of crude oil locally, I think the whole problem will be solved somehow. I don’t think there will be any need for anybody to go and bring in petrol again, especially if Dangote is selling at a reasonable price,” he added.
Fashola, on the other hand, advised Dangote not to monopolize petroleum if he eventually received government help, insisting that the refinery sell PMS at a reasonable price.
“Dangote too should not see it as an advantage to start monopolising the market by raising fuel prices. Dangote has to come with a clean mind by selling at a reasonable price to the public, otherwise, people will still go and start importing if Dangote’s price is high. But if the price is normal and anybody who brings in product from abroad knows that he would run at a loss, nobody will venture into it. Dangote should be sincere, and the government should support him,” he stated.
On pricing, Fashola expressed optimism that the refinery would bridge the price gap between big and independent marketers, including Nigerian National Petroleum Company Limited retail shops. He also predicted that there will be a marginal price reduction, depending on local crude supplies.
“I don’t want to start predicting, but we envisage a situation where the price gap would be closed somehow, unlike what is obtainable now when the NNPC sells at N568 in Lagos and independent marketers sell at N650, N700 or more. I believe that the gap will be closed. Even if there is a price differential, it won’t be as wide as it is now.
“We also expect that there may be a little bit of a reduction in the price, but I believe that the price will be unified somehow. I don’t want to mention figures, I like to say something accurate. For now, I cannot mention any price, but I know that there may be a little reduction and there may be a little bit of uniformity in the price. It won’t be like what we have presently,” he noted.
Recall, it was earlier reported that the National President of IPMAN, Abubakar Maigandi accused Dangote last week of refusing to collaborate with the association, which he claimed would benefit the company in the market.
The Dangote refinery has reduced the price of diesel in the country from roughly N1,600 per litre to N1,000. Diesel presently sells for roughly N1,200 per litre.
Dangote recently said Nigeria would no longer import any fuel by the time he begins the sale of PMS in the second or third week of July.
