The long-awaited commencement of operations at the Dangote refinery has been met with mixed reactions from petroleum marketers as the Nigerian National Petroleum Corporation (NNPC) secures a deal to purchase petrol at N766 per litre from the facility.....KINDLY READ THE FULL STORY HERE▶
According to the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, the Dangote refinery will begin distributing petrol to marketers on Sunday, September 15, 2024, with an initial supply of 25 million litres per day. However, the NNPC will be the sole buyer of the product, and interested marketers will have to purchase it from the national oil firm through its trading company.
In response to this arrangement, the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlets Association of Nigeria (PETROAN) have demanded direct access to petrol from the Dangote refinery. They argue that the market should be liberalized and open to all, in line with the willing-buyer and willing-seller commitment previously made by the NNPC.
IPMAN’s National Publicity Secretary, Chinedu Ukadike, stated, “It should be open for all in line with the willing-buyer and willing-seller comments made by the NNPC. We are also looking at how to build our logistics and come up with our price.”
PETROAN’s National President, Billy Gillis-Harry, expressed concerns about the risks of creating a new domestic monopoly in the oil and gas sector, emphasizing the need for transparency in pricing and transactions.
Despite these concerns, the NNPC has mobilized 300 trucks to lift petrol from the Dangote refinery on Sunday, with plans to transport the product to coastal depots in Warri and Port Harcourt using tankers and ships.
Sources from the Federal Ministry of Petroleum Resources, NNPC, and major energy marketers have confirmed that the Dangote refinery will sell its petrol at N766 per litre to the NNPC. This price is attributed to the deal to supply crude to the refinery in naira, similar to the previous Direct Sale of crude oil and Direct Purchase of petroleum products (DSDP) transactions between NNPC and foreign refineries.
The potential impact on pump prices remains uncertain, as marketers will need to factor in transportation costs, levies, and other margins. However, some industry players suggest that the retail price in Lagos could be around N790 per litre, while in the far north, it may reach N820 per litre due to the distance.
As the Dangote refinery begins operations, the dynamics of the Nigerian petroleum market are set to change, with marketers eagerly awaiting further details on pricing and access to the domestically produced fuel.
