Oil marketers have expressed concern on the delay in revealing the pricing of Dangote Petroleum Refinery’s Premium Motor Spirit, or petrol, given that the landing cost of imported PMS is currently approximately N1,120 per litre.
Dealers said that since the government has opened up the market to competition, marketers would import the commodity in the event of a high PMS price from the Dangote refinery.
The Major Energies Marketers Association of Nigeria disclosed in July of this year that PMS had a landing cost of N1,117 per liter. The price at which the commodity lands on Nigerian soil is known as the landing cost.
The Nigerian National Petroleum Company Limited increased the price of gasoline last week to between N855 and N897 per litre, while some independent dealers increased their rates to above N1,000 per litre. In July, the price of gasoline fluctuated between N600 and N700 per litre at the pump.
Additionally, information was acquired on Monday indicating that oil marketers were forced to intensify their talks with overseas partners in an effort to begin importing gasoline due to the postponement of the Dangote gasoline price release.
While awaiting the Dangote gasoline price, IPMAN was in communication with its international partners, according to Abubakar Maigandi, National President of the Independent Petroleum Marketers Association of Nigeria. However, he cautioned that a high cost from Dangote would result in enormous PMS importation.
We are depending on our international partners to estimate the landing cost of gasoline to determine the cost of bringing the product to Nigeria. This will enable independent marketers to learn how to import the product as well. As a result, we are awaiting their data.
“I’ll tell you the actual landing cost once we get the data from our foreign partners. So if the landing cost is cheaper than what the Dangote refinery will sell, then we will see how to bring in the product.
“You know, it is now an open market, so anywhere we see a cheaper rate with good quality, we will buy from there. We don’t know the price of Dangote PMS. We are waiting for the refinery to release the price. However, we are discussing it with our foreign partners,” he said.
Maigandi explained that allowing multiple importers of the PMS would ensure availability and competition.
“One advantage of allowing everyone to bring in the product is that there will be guaranteed availability of products.
“There is also going to be competition. Once this happens, everybody will try to see how they can sell their products and buy another one. It is only when you sell what you have that you can generate profit,” he stated.
According to a representative of the Dangote Group, Alhaji Aliko Dangote, the group president, will make every effort to lower the price of gasoline.
Whether the Nigerian National Petroleum Company Limited accepts to be its off-taker or not, Dangote would sell PMS in Nigeria, according to the official, who wished to remain anonymous due to lack of authority to talk on the subject.
The person who provided the information claims that Aliko Dangote is a patriotic man who loves his nation and is willing to make sacrifices for the benefit of the general populace.
He recounted how the refinery reduced the price of fuel from approximately N1,600 to N950, after which it began to fluctuate between N1,100 and N1,200 because of changes in foreign exchange.
“When we started diesel, the product was around N1,700. We crashed the price to N1,200 and later, N950, before it now hovers around N1,100 and N1,200. Those who were milking the nation with dirty diesel saw it and they reduced their cost too. We will do it again,” the source stated.
When asked if Dangote might sell his PMS locally given the NNPC’s apparent unwillingness to cooperate with the refinery, the insider said, “Why not? We would sell locally because Alhaji Aliko Dangote is a patriotic Nigerian who is willing to make sacrifices for his country.
‘We will bend for the country. We have high-quality PMS for the country. Some people who are importing fuel and some owners of refineries and blending plants in foreign countries don’t want this to happen. Their $117bn shipping business to West Africa is at stake.”
When the official was asked to disclose when the PMS will be out, he said, “Don’t worry, we are on course. We are ‘talk and do’. When we talk, we make it happen.”
The official did note, however, that the Dangote Group is still awaiting word from the NNPC and will make its own determination should the state-owned enterprise decline to cooperate.
The PUNCH claims that the terms for the sale of the Dangote refinery’s PMS have not yet been agreed upon between the NNPC and the refinery.
Olufemi Soneye, the NNPC’s spokesperson, stated in a statement on Saturday that the company would not purchase Dangote PMS unless the price was lower than that of the global market.
Aliko Dangote has stated that the refinery was waiting for the NNPC to release its product, but this is untrue.
The NNPC further stated that it has no desire or purpose to become the distributor for any company in a free market setting, and that Dangote and any other domestic refineries are free to sell directly to any marketer on a willing buyer, willing seller basis.
“The DRL’s or any other domestic refinery’s access to the Nigerian market is unaffected by the recent increases in PMS prices. In reality, the refinery has a great chance to offer its goods at a discount in the Nigerian market if the current pricing are thought to be excessive.
Soneye said that if the Dangote refinery thought the new pricing were too high, it may cut its price.
“We emphasise that there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL. The NNPC Ltd will only fully off-take PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria,” the NNPC said.
According to our source, the NNPC’s remark suggests that the company is not yet prepared to cease importing, particularly given that its refineries are still not up and running.
It seemed as though the NNPC had abandoned the Dangote refinery after revealing its PMS.
Aliko Dangote announced during the 650,000-capacity refinery’s opening that gasoline will be produced there as soon as the NNPC was prepared.
After all negotiations with the NNPC were completed, Dangote revealed that the gasoline will arrive at the gas stations within 48 hours (starting on Tuesday), indicating that the lines would soon end.
Under the existing structure for the sale of naira crude, the group president emphasized that the NNPC would be the firm in charge of marketing and distributing the product.
“We roll once the NNPC is ready,” Dangote emphasized.
However, it appears that the two firms’ negotiations have broken down, thus gasoline imports will likely keep going at a rate of N2 trillion per month until the government refineries are fixed.
The NNPC has refuted in several ways over the last two days that it would set Dangote’s price or act as its exclusive distributor.
This came after the state-owned energy company claimed that the refinery had given it until September 15 to remove its gasoline, a claim that the Dangote official refuted.
