Oil marketers have raised concerns about the price of petrol (Premium Motor Spirit) produced by the Dangote Petroleum Refinery, with prices ranging from N950 per litre in Lagos to over N1,000 per litre in the far north, according to the Nigerian National Petroleum Company Limited (NNPC). Marketers warn that these prices could lead to increased importation of petrol into Nigeria, as imported fuel may become more attractive.
The NNPC announced on Monday that the price of petrol lifted from the Dangote refinery would vary across regions, reaching as high as N1,019 per litre in Borno and other northern states. In southern states like Oyo and Rivers, it would sell for N960 per litre, while Lagos would have the lowest price at N950 per litre.
The NNPC also clarified that the pricing of the PMS from the Dangote refinery was based on international market rates and was not set by the government, with payments currently being made in dollars for September 2024 offtake. However, the company indicated that naira payments would begin in October.
Concerns Over High Prices
Oil marketers, including major players, have expressed concerns that the high prices from Dangote’s refinery could justify the continued importation of petrol. Some vessels carrying imported PMS were expected to arrive in Nigeria as early as Tuesday, with marketers pointing out that the market might see petrol prices as high as N1,200 per litre at some stations, especially in areas where cheaper alternatives are not available.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) also raised alarms, urging the NNPC to ensure that locally refined petrol is not sold at higher prices than imported fuel, arguing that such a scenario would undermine the nation’s push for energy self-sufficiency.
NNPC’s Sole Off-Taker Role Criticized
The Organized Private Sector and trade associations like the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) have voiced concerns over NNPC’s position as the sole off-taker of petrol from the Dangote refinery. They argue that this arrangement creates a monopolistic situation that goes against the principles of a deregulated market, potentially distorting pricing mechanisms and reducing competition.
NACCIMA’s President, Dele Oye, suggested that opening up the market to more buyers from Dangote refinery would enhance competition and prevent regulatory control from dictating prices. The Lagos Chamber of Commerce and Industry (LCCI) echoed similar sentiments, adding that independent marketers should have the freedom to buy from Dangote and sell at competitive prices.
Calls for Transparency and Competition
Industry players, including the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), are calling for greater transparency in the pricing of Dangote’s petrol. PETROAN’s President, Billy Gillis-Harry, described the NNPC’s pricing breakdown as “terrifying” but commended the transparency. He emphasized that market competition and minimal importation of PMS would be essential to stabilizing the supply and reducing prices over time.
As Nigeria grapples with inflation and economic hardships, the rising cost of petrol is exacerbating the financial burden on consumers, prompting stakeholders to push for a more competitive and transparent fuel market in the country.
