Fuel: Oil marketers suggest to Dangote a price of N550 per litre

Dangote Refinery and oil marketers have increased their efforts to make final choices about the price and delivery of gasoline to filling stations across the country, in tandem with the Nigerian National Petroleum Company, NNPC Limited, as it works to end the gasoline shortage in Lagos and its surrounds.

The product, which is now mostly imported from overseas markets, will be produced and distributed by Dangote Refinery, which has the capacity to refine 650,000 barrels of crude oil per day (bpd). Production is expected to begin in May 2024.

Over the weekend, it was revealed that the parties have been meeting and exchanging notes with respect to pricing, distribution, and margins to value chain participants, such as insurers and transporters.

Recall that depot owners sell the commodity to independents at N640 per litre after purchasing it from NNPC Limited for N556 per liter.
However, it was discovered that independent markers have suggested N550 per litre to the Dangote Refinery management, with whom they are currently in conversation.

We have proposed N550 per litre — Marketers

“We have been discussing with Dangote Refinery,” said Alhaji Abubakar Migandi Garima, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), who verified the development Wednesday. The conversation is still continuing on, with the main topics being pricing, margins, and other matters.

“We have proposed that the lifting price should be N550 per litre in Lagos. The price of the product will differ from one part of Nigeria to another because of distance and cost of delivering petrol to different locations.

“We are currently waiting on Dangote Refinery to conclude and communicate the price per litre, so we can plan to lift the product when it comes on stream.

‘’We expect that the price of the locally refined petrol would be cheaper than imported petrol, due mainly to local availability of the bulk of its crude oil and removal of transportation cost.”

Let’s enjoy benefit of domestic refining — Experts, consumers

According to Professor Wumi Iledare, Executive Director of the Emmanuel Egbogah Foundation for Petroleum and Energy Industry Economics and Policy Advocacy, Nigerians would soon or later be able to take advantage of lower gas prices due to the Dangote Refinery’s upcoming opening.

He said: “The price of petroleum is majorly correlated with the acquisition cost of crude oil. The cost of running the refinery and opportunity cost of capital contribute marginally. Distribution and retailing costs are important but the crude cost matter the most.

‘’Thus, low price of petrol in Nigeria when Dangote Refinery operates at full capacity, is a possibility indeed, ceteris paribus.”

A motorist, who pleaded anonymity, said: “Most people have stopped driving every day. That is why we do not experience much traffic in the cities, including Lagos anymore. I am pleased that the Dangote Refinery will soon supply petrol. We hope and pray that it will be cheaper than the imported product.”

FG should float $1bn fund to complete new refineries — Refinery owners

However, President of Crude Oil Refinery-owners Association of Nigeria, CORAN, Mr. Momoh Oyarekhua, said: “ The coming on stream of Dangote Refinery is a very good development, especially as it would reduce huge dependence on imported petrol, conserve foreign exchange and create additional jobs.

“The government needs to support the construction of other indigenous refinery projects, currently at different stages nationwide. We have proposed the creation of $1 billion fund to support local investors.

‘’If this is done, lack of funds, which has always been a major challenge, would to some extent be addressed.

“The federal government and other stakeholders, including the Nigerian Midstream, Downstream Petroleum Regulatory Authority, NMDPRA, should engage with indigenous investors to explore the best ways and means of bringing this into reality in the best interest of oil and gas industry and the nation’s economy.”

We expect sector wide impact – CPPE

Also, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, CPPE, Dr. Muda Yusuf, said: “If we are able to take advantage of Dangote refinery to reduce our consuming products, it will go a long way in easing the country’s foreign exchange crisis. However, it would also make positive impact across all sectors.”

It’s premature for our reaction—NLC

Asked to react to the development yesterday, an official of the Nigeria Labour Congress, NLC, who chose to remain anonymous, said it was premature for comments, saying “how can we react to speculations? When we see what they have done, then, we can say something. For now, we think it is premature.”
NNPC Ltd moves to end shortage

On the current scarcity of fuel in some parts of Lagos and its environs, the Chief Corporate Communications Officer, NNPC Limited, Olufemi Soneye, stated: “The NNPC Limited wishes to inform the general public that the tightness in Premium Motor Spirit, PMS, supply witnessed in some filling stations in Lagos was a result of an issue in one of the depots in the area.

“The NNPC Retail Limited, our retail arm, has since resolved the issue and effective tomorrow (today), normalcy will be restored within the affected area.

“NNPC Limited calls on motorists in Lagos to avoid panic buying of PMS as all hands are on deck to sustain sufficiency in the supply of petroleum products in the area.”