Independent petroleum marketers in Nigeria are optimistic that the Dangote Petroleum Refinery will offer Premium Motor Spirit (petrol) at a price between N600 and N650 per litre when it enters the market.
Members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed their belief that the Dangote refinery could reduce the price of petrol, similar to its impact on diesel prices.
Hammed Fashola, the National Vice President of IPMAN, stated in an interview on Monday that the $20 billion refinery has the potential to lower fuel costs, provided it receives the necessary support, particularly in terms of crude oil supply.
He explained that the Nigerian National Petroleum Company Limited (NNPCL), the sole importer of Premium Motor Spirit (PMS), currently sells to marketers at N570 per litre. However, most members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) purchase from private depot owners at prices exceeding N700 per litre.
“We are marketers, we go for the best. We have been buying from the NNPC, but if the opportunity of Dangote comes and the price is favourable, we will grab it. It depends on the price.
“The official price from the NNPC is around N570/litre, but the third parties, the private depots sell PMS to most of our members at N700 and above.
“Plus or minus, we hope Dangote can sell between N600 and N650/litre. N600 is still okay. However, it depends on the cost of the production from Dangote’s end. We have to be factual and sincere to ourselves. The NNPC we are talking about has an element of subsidy or what they now call under-recovery. I think something is hidden there,” Fashola stated.
Commenting on diesel prices, Fashola recalled, “We saw how the Dangote refinery brought down the cost of diesel. When the refinery started producing, diesel was around N1,600 and it went down to N1,000.
“Now you can buy diesel at N1,150 or N1,200/litre. We expect the same with PMS, but this crude crisis is a major challenge. Even if Dangote is buying crude in naira, if it is at the international market price, it will make no difference. We have to be realistic.”
The IPMAN leader said the association has had business discussions with some officials of the refinery on a possible partnership, saying the marketers are waiting for Dangote.
“The discussion continues. We are on course. I think very soon we will conclude the discussion. We are waiting,” he stated.
The President of the Dangote Group, Alhaji Aliko Dangote, had last month projected that the refinery would begin the production of petrol between August 10 and 12, 2024.
However, the 650,000 barrels per day capacity refinery could not roll out petrol on Monday for different reasons.
Findings showed that the ongoing crude supply crisis might be a setback to the refinery.
