Marketers are seeking direct access to Premium Motor Spirit (petrol) from the Dangote refinery, expressing concerns over the Nigerian National Petroleum Corporation’s dominance in the market.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, argued that the market should be open to all, in line with the NNPC’s commitment to a willing-buyer, willing-seller model.
Last Saturday, NNPCL stated that it was not the sole off-taker of products from the Dangote refinery and that the refinery could sell its petrol to any marketer. However, a week later, the Federal Government announced that NNPC would be the exclusive buyer of petrol from the refinery.
At a press briefing in Abuja on Friday, Finance Minister Wale Edun, represented by Federal Inland Revenue Service Chairman Dr. Zacceus Adedeji, revealed that interested marketers would need to purchase petrol from the national oil firm via its trading company. Edun also announced that the Dangote refinery would start distributing petrol to marketers on Sunday, with an initial 25 million litres per day.
Edun said, “I am glad to announce that all agreements are in place, and the loading of the first batch of PMS, as previously announced by NNPC, will commence on Sunday, September 15, 2024. From October 1, NNPC will supply crude oil to the Dangote refinery to be paid in naira. In return, Dangote will supply PMS and diesel of equivalent value to the domestic market, also paid in naira. However, for now, PMS will only be sold to NNPC, which will then distribute it to various marketers.”
Ukadike called for a liberalised market. “It should be open for all, in line with the willing-buyer, willing-seller model mentioned by NNPC. We are also exploring how to build our logistics and establish our pricing,” he stated.
Billy Gillis-Harry, National President of the Petroleum Products Retail Outlets Association of Nigeria, expressed concerns about the potential creation of a new domestic monopoly. “We don’t know the price of petrol yet, and we have not been informed about the government’s actions. We are transitioning from NNPC’s monopoly on importation to potentially another form of monopoly domestically, which poses risks for the industry,” he said.
The NNPC has mobilised 300 trucks to lift petrol from the Dangote refinery starting today. NNPC spokesperson Olufemi Soneye confirmed that trucks were arriving at the refinery, with loading scheduled to begin on Sunday.
Oil marketers have noted that the price of Dangote petrol has not been disclosed yet and that independent marketers will currently buy the product from NNPC.
The National Operations Controller of IPMAN, Mustapha Zarma, stated, “Independent marketers have not been given an offer by Dangote to determine the actual off-take price. For now, we will get the product from NNPC, but hopefully, we may start sourcing directly from Dangote in the coming weeks.”
According to reports, Dangote petrol will be sold to NNPC at N766 per litre. This price is influenced by the deal to supply crude to the Dangote refinery in naira.
A major marketer, who spoke on condition of anonymity, indicated that this price might be similar to previous Direct Sale of Crude oil and Direct Purchase of Petroleum Products transactions.
A senior IPMAN official noted that if marketers purchase petrol at N766, they would factor in transportation and other costs, potentially setting retail prices at around N790 in Lagos and up to N820 in the far north. Gillis-Harry commented that while a lower price is preferable, his group has not been consulted on the pricing, and there is a need for further discussions to determine the final retail price.
