Oil marketers in Nigeria have indicated that the pricing of Premium Motor Spirit, commonly known as petrol, from the Dangote Petroleum Refinery could drive further petrol imports into the country.
According to The PUNCH, this comes after the Nigerian National Petroleum Company Limited released the new prices on Monday.
Dealers also emphasized the need for transparency in the pricing structure, as they expect shipments of imported PMS to start arriving in Nigeria as early as Tuesday.
This development has sparked reactions from the Organised Private Sector, which criticized NNPC’s role as the exclusive buyer of petrol from the $20 billion refinery, located in Lekki, Lagos.
Industry players are pushing for competition in the market, arguing that NNPC’s dominance as the sole off-taker could stifle healthy competition and drive prices up.
On Monday, the NNPC disclosed that it would be selling petrol sourced from the Dangote refinery at over N1,000 per litre in the northern regions.
According tothe NNPC’s spokesperson, Olufemi Soneye, in a statement titled ‘NNPC Ltd Releases Estimated Pump Prices of PMS from Dangote Refinery Based on September 2024 Pricing,’ the price could reach as high as N1,019 per litre in Borno State and N999.22 per litre in cities like Abuja, Kano, and Sokoto.
For areas in the southern parts of the country, including Oyo and Rivers, the price is set to be N960 per litre.
The lowest price, according to an infographic released by NNPC, will be N950 per litre in Lagos and its surrounding areas.
“The NNPC Ltd has released estimated prices of Premium Motor Spirit (PMS), also known as petrol, from the Dangote Refinery in its retail stations across Nigeria. The NNPC Ltd wishes to clarify that, as per the Petroleum Industry Act, the government does not set PMS prices. Prices are instead negotiated directly between parties at arm’s length,” Soneye explained.
The NNPC further clarified that the PMS it loaded from the Dangote Refinery on Sunday was paid for in US dollars, not naira.
This dollar transaction will continue until October 1, 2024, after which naira transactions will begin.
“The NNPC Ltd assures the public that if the quoted pricing is disputed, we will gladly accept any discount from the Dangote Refinery and pass on 100 percent of the savings to the public,” the statement read.
The NNPC also confirmed that the estimated pump prices were based on the pricing for September 2024 PMS obtained from the Dangote Refinery and would be applied at NNPC’s retail stations nationwide.
There was, however, a disagreement between Dangote Group and NNPC over the price at which the refinery sold petrol. On Sunday, NNPC had announced that it purchased PMS from Dangote at N898 per litre, a claim the refinery quickly refuted.
A spokesman for the Dangote Refinery, Anthony Chiejina, described NNPC’s statement as “misleading and mischievous.”
Amid these developments, major oil marketers believe the high price of Dangote’s petrol would push many marketers to import petrol.
One industry source, speaking anonymously, suggested that some PMS vessels could arrive in Nigeria as early as Tuesday.
“There is uncertainty about how NNPC and Dangote will handle the situation because many companies will be forced to import PMS. There could be transparency issues in product allocation, or some big players might not get enough from the refinery, necessitating supplementary imports,” the source revealed.
The marketer also predicted that consumers could face different prices depending on where they buy petrol.
“You could see petrol being sold at N1,200 per litre in some stations, even in Lagos, while others might offer it at N950. The disparity will create a market for imported products, as the high price of Dangote petrol will drive demand for cheaper alternatives. People who don’t mind waiting may opt for lower-priced stations, while those in a hurry will likely buy at higher rates,” the marketer explained.
On Sunday, NNPC lifted its first batch of PMS from the Dangote Refinery and set new retail prices for its stations across the country.
Prior to this, NNPC’s retail outlets in Lagos were selling petrol at about N855 per litre, but Dangote’s fuel was priced at N950 in Lagos and N1,019 in Borno.
While the pricing saga continues to unfold, oil marketers are keeping a close eye on the situation, especially as imported PMS begins to arrive.
The price disparity and NNPC’s involvement as a sole buyer could have significant implications for the fuel market in the coming months.
