Independent Petroleum Marketers Hopes on Dangote Refinery to Reduce Petrol Price to N600-N650/Litre
Independent petroleum marketers across Nigeria are expressing optimism that the Dangote Petroleum Refinery will significantly reduce the price of Premium Motor Spirit (PMS), commonly known as petrol, to between N600 and N650 per litre once it commences operations.
Under the aegis of the Independent Petroleum Marketers Association of Nigeria (IPMAN), the marketers believe that the Dangote refinery has the potential to lower fuel costs, mirroring its impact on diesel prices.
IPMAN National Vice President, Hammed Fashola, shared these views during an interview on Monday, highlighting the transformative potential of the $20 billion refinery.
Fashola pointed out that while the Nigerian National Petroleum Company Limited (NNPCL) currently sells petrol to marketers at N570 per litre, many IPMAN members are forced to purchase from private depot owners at rates exceeding N700 per litre. This price disparity has fueled anticipation that the Dangote refinery will offer a more competitive price.
“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 favorable, we will grab it. It depends on the price,” Fashola explained.
“The official price from the NNPC is around N570 per 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 per litre. N600 is still okay.”
Fashola also acknowledged the complexities surrounding petrol pricing, noting the potential impact of production costs at the Dangote refinery. He suggested that the current pricing by the NNPCL might be influenced by hidden subsidies or under-recovery practices.
Reflecting on the refinery’s influence on diesel prices, Fashola recalled, “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 per litre. We expect the same with PMS, but this crude crisis is a major challenge.”
The IPMAN leader emphasized the importance of crude supply, suggesting that even if Dangote sources crude in naira, international market prices could still affect production costs. “We have to be realistic,” he stated.
Fashola also disclosed that IPMAN has been in discussions with officials from the Dangote refinery about potential partnerships and business collaborations, with the association eagerly awaiting the refinery’s market entry.
“The discussion continues. We are on course. I think very soon we will conclude the discussion. We are waiting,” he remarked.
The Dangote Petroleum Refinery, with a capacity of 650,000 barrels per day, was initially expected to begin petrol production between August 10 and 12, 2024. However, production has been delayed due to ongoing challenges in securing crude supply.
The refinery’s launch is highly anticipated across Nigeria, as it is expected to play a crucial role in stabilizing fuel prices and enhancing the country’s energy security.
