In Nigeria, independent petroleum merchants are expecting that when Premium Motor Spirit—also known as petrol—is eventually allowed into the market, the Dangote Petroleum Refinery will sell it for N600 or N650 per litre.
According to dealers operating under the Independent Petroleum Marketers Association of Nigeria, the Dangote refinery will cause the price of petrol to plummet, just like it did for diesel.
In an interview on Monday, IPMAN National Vice President Hammed Fashola informed our correspondent that if the $20 billion refinery received the necessary funding, fuel prices would decrease, particularly concerning the availability of crude oil.
The Nigerian National Petroleum Company Limited, the exclusive importer of PMS, has been supplying it to marketers for N570 per litre, but the majority of IPMAN members purchase it from private depot owners for N700 and more, he claims.
“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 favourable, 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.
“We know Dangote refinery crashed the price of diesel,” Fashola recalled when discussing the cost of diesel. Diesel cost about N1,600 when the refinery first began to produce it, and it now only costs 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 head of IPMAN stated that the organisation has discussed potential commercial partnerships with some refinery executives and that the marketers are awaiting Dangote’s arrival.
“The discussion continues. We are on course. I think very soon we will conclude the discussion. We are waiting,” he stated.
Last month, Alhaji Aliko Dangote, President of the Dangote Group, predicted that the refinery would start producing petrol between 10 and August 12, 2024. For various reasons, the refinery with a capacity of 650,000 barrels per day was unable to start producing petrol on Monday.
The continued difficulty in the supply of crude oil may be a hindrance to the refinery, according to findings.