Independent petroleum marketers in Nigeria are optimistic that the Dangote Petroleum Refinery will price its Premium Motor Spirit (PMS), commonly known as petrol, between N600 and N650 per litre once it enters the market.
Members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) believe the refinery could significantly lower petrol prices, similar to its impact on diesel prices.
IPMAN National Vice President Hammed Fashola shared in an interview on Monday that the $20 billion refinery has the potential to reduce fuel costs, provided it receives the necessary support, particularly concerning crude oil supply.
Currently, the Nigerian National Petroleum Company Limited (NNPC), the sole importer of PMS, sells to marketers at N570 per litre. However, many IPMAN members purchase from private depot owners at N700 per litre or more.
“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.
“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.
Speaking about diesel price, Fashola recalled, “We know Dangote refinery crashed the price 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.
It’s worth noting that Alhaji Aliko Dangote, President of the Dangote Group, had projected that the refinery would commence petrol production between August 10 and 12, 2024.
However, the 650,000 barrels per day capacity refinery did not begin production on Monday as anticipated, due to various issues. Investigations indicate that the ongoing crude supply crisis may be a significant setback for the refinery.
