Oil Marketers Propose N550/litre Price to Dangote.
The Nigerian National Petroleum Company, NNPC Limited, is making strides to alleviate petrol scarcity in Lagos and its surroundings, with discussions underway between Dangote Refinery and oil marketers regarding pricing and distribution of petrol to filling stations nationwide.
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Dangote Refinery, with a refining capacity of 650,000 barrels per day, is gearing up to produce and distribute petrol, a significant portion of which is currently imported from the global market, starting from May 2024.
Negotiations between Dangote Refinery and independent oil marketers have been ongoing, focusing on pricing, distribution, and profit margins for stakeholders in the value chain, including transporters and insurers.
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Depot owners currently purchase petrol from NNPC Limited at N556 per litre and sell to independent marketers at N640 per litre. However, independent marketers have proposed a price of N550 per litre to Dangote Refinery in ongoing discussions.
Alhaji Abubakar Migandi Garima, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed the proposal, emphasizing that the price of petrol may vary across different regions of Nigeria due to distance and delivery costs.
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The potential introduction of locally refined petrol holds promise for reduced costs compared to imported petrol, primarily due to the availability of crude oil locally and the elimination of transportation expenses.
Experts and consumers alike anticipate the benefits of domestic refining, anticipating potentially lower petrol prices and increased availability of the product. Professor Wumi Iledare of the Emmanuel Egbogah Foundation for Petroleum and Energy Industry Economics and Policy Advocacy highlights the correlation between petrol prices and crude oil acquisition costs, suggesting the possibility of lower petrol prices with increased domestic refining capacity.
While motorists express optimism about the prospect of cheaper petrol, industry stakeholders advocate for government support for indigenous refinery projects. Momoh Oyarekhua, President of the Crude Oil Refinery-owners Association of Nigeria (CORAN), proposes the establishment of a $1 billion fund to support local investors and expedite the completion of new refineries across the country.
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The coming on stream of Dangote Refinery is expected to have wide-ranging impacts across various sectors of the economy, including easing foreign exchange pressures and creating additional jobs.
As discussions continue between Dangote Refinery and oil marketers, the Nigerian Labour Congress (NLC) refrains from commenting on speculations, deeming it premature to offer a reaction until concrete developments unfold.
Meanwhile, NNPC Limited assures the public of efforts to address the current fuel scarcity in Lagos, attributing the tightness in petrol supply to an issue at one of the depots in the area. NNPC Retail Limited has resolved the issue, and normalcy is expected to be restored within the affected area.
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