The Independent Petroleum Marketers Association of Nigeria (IPMAN) announced that no local oil marketer will be able to buy petrol from the Dangote Petroleum Refinery due to high pricing. According to IPMAN, only the Nigerian National Petroleum Company Limited (NNPCL) can purchase and distribute the product within Nigeria.
Alhaji Aliko Dangote, President of Dangote Industries Limited, recently revealed that the $20 billion refinery is set to begin petrol production in August 2024, following successful resolutions of its crude oil supply issues with NNPC and the Federal Government. Dangote projected annual revenue of over $26 billion from the refinery’s petrol output.
However, oil marketers have raised concerns about the refinery’s pricing structure. They indicate that Dangote’s petrol will be priced at international market rates, which are significantly higher than the current domestic pump prices.
The Deputy National President of IPMAN, Zarma Mustapha, emphasized that “no marketer can be able to buy the product from him” due to the high cost. He explained that the refinery must recover its costs and make a profit, which means the price of petrol from Dangote will exceed domestic selling prices by approximately N400 to N500 per liter.
Mustapha further explained that the only way for Dangote’s petrol to be sold at affordable prices across Nigeria is if NNPC intervenes. He suggested that NNPC could purchase the petrol directly from the refinery and then resell it to marketers at lower rates, similar to its current importation practices.
The landing cost of petrol in Nigeria is reported to be N1,117 per liter as of mid-July 2024, while the retail price ranges between N660 and N800 per liter. This discrepancy highlights the challenge for marketers who might not sustain operations if forced to buy at international rates and sell at the lower domestic prices.
Major Energies Marketers Association of Nigeria (MEMAN) Executive Secretary Clement Isong also noted that the published landing cost reflects the true cost of petrol. He pointed out that Dangote’s refinery, being a business, will aim to avoid financial losses.
Currently, NNPC remains the sole importer of petrol into Nigeria due to challenges other marketers face in accessing foreign currency. The NNPC had not responded to inquiries about its plans regarding Dangote’s petrol as of the time of this report.
