Independent petroleum marketers in Nigeria are anticipating that the Dangote Petroleum Refinery will price its Premium Motor Spirit (PMS), commonly known as petrol, at N600 to N650 per litre when it becomes available in the market.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed optimism that the Dangote refinery would reduce the cost of petrol, similar to its impact on diesel prices.
Hammed Fashola, the National Vice President of IPMAN, shared this perspective during an interview with journalists on Monday, noting that the $20 billion refinery could lower fuel costs if it receives the necessary support, particularly regarding crude oil supply.
Fashola noted that the Nigerian National Petroleum Company Limited (NNPC), currently the sole importer of PMS, sells petrol to marketers at N570 per litre.
However, most IPMAN members purchase the product from private depot owners at prices exceeding N700 per litre.
“As marketers, we seek the best options. We’ve been sourcing from the NNPC, but if Dangote offers a better price, we’ll definitely consider it,” Fashola said.
“The official price from NNPC is around N570 per litre, but private depots are selling PMS to many of our members at over N700 per litre. Ideally, we hope Dangote’s price will range between N600 and N650 per litre. Even N600 would be acceptable. However, this will depend on Dangote’s production costs. We must be realistic—the NNPC’s pricing involves some form of subsidy or what they now term under-recovery. There may be more to it than meets the eye,” Fashola added.
Reflecting on diesel prices, Hammed Fashola noted, “We all witnessed how the Dangote refinery brought down the price of diesel. When production started, diesel was priced at around N1,600 per litre, but it dropped to N1,000. Currently, diesel can be purchased for N1,150 or N1,200 per litre. We anticipate a similar effect with PMS, but the ongoing crude supply crisis poses a significant challenge. Even if Dangote purchases crude in naira, as long as it’s priced according to the international market, the impact may be limited. We need to be realistic about this.”
Fashola also mentioned that the Independent Petroleum Marketers Association of Nigeria (IPMAN) has engaged in business discussions with officials from the Dangote refinery about a potential partnership, adding that the marketers are eagerly awaiting the refinery’s next steps.
“The discussions are ongoing, and we are making progress. I believe we will reach a conclusion soon. We are waiting,” he remarked.
It is worth noting that Alhaji Aliko Dangote, President of the Dangote Group, had previously projected that the refinery would begin producing petrol between August 10 and 12, 2024. However, the refinery, which has a capacity of 650,000 barrels per day, was unable to commence petrol production on Monday due to various challenges.
Reports indicate that the ongoing crude supply crisis may be a contributing factor to this delay.
