The Nigerian oil market is seeing new developments as independent petroleum marketers have called for direct access to petrol from the Dangote Refinery.
Their plea comes after the Nigerian National Petroleum Corporation Limited (NNPCL) announced its role as the sole distributor of products from the $20 billion Lekki-based refinery.
This arrangement has raised concerns among stakeholders about a potential monopoly in the sector, especially as the Nigerian government had initially indicated that the refinery would operate on a willing-buyer, willing-seller basis.
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), stressed that the market should be open to everyone, allowing for fair competition.
He called on the NNPCL and the Dangote Group to honor the earlier commitment of not restricting the sale of Premium Motor Spirit (PMS) to one buyer.
“It should be open for all in line with the willing-buyer and willing-seller comments made by the NNPC. We are also looking at how to build our logistics and come up with our price,” he stated.
This pushback from marketers followed a significant announcement made by the Federal Government. Just a week earlier, the government revealed that NNPCL would be the sole buyer of petrol from the Dangote Refinery, at least for now.
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, confirmed during a press briefing in Abuja that any interested marketers would have to buy PMS through the NNPCL, which controls the distribution.
In his statement, Edun highlighted that the refinery would start distributing petrol to the market on Sunday, with an initial daily supply of 25 million liters.
He said, “I am glad to announce that all agreements have been put in place, and the loading of the first batch of PMS, as already announced by NNPC, will commence on Sunday, September 15, 2024. And from October 1, NNPC will commence the supply of crude oil to the Dangote refinery to be paid in naira.
“In return, Dangote refinery will supply PMS and diesel of equivalent value to the domestic market to be paid in naira. But for now, PMS will only be sold to NNPC. NNPC will then sell to various marketers.”
Billy Gillis-Harry, the National President of the Petroleum Products Retail Outlets Association of Nigeria (PETROAN), voiced his concern about this new arrangement, warning that it could lead to another form of monopoly.
Gillis-Harry said, “Right now, even on Saturday, that business (petrol) is going to start rolling out tomorrow (Sunday), we don’t know what the price might be. Nobody has informed us about anything; we are not aware of what the government is doing.
“We don’t know any of the pricing templates yet or the matrix that will bring about the pricing template. We have been asking Dangote or anybody that is in charge of this transaction to be transparent, but somehow, we have not got any of that information.
“We are about to leave NNPC monopoly from importation and now we are also going to have that in a domestic environment, that portends danger for the industry.”
The concern expressed by marketers is that this exclusive arrangement with NNPCL could stifle competition in the domestic market. Gillis-Harry pointed out that marketers are wary of transitioning from a monopoly based on importation to a domestic one.
Meanwhile, the NNPCL has wasted no time in preparing for the distribution of petrol. On Saturday, it mobilized 300 trucks to lift PMS from the Dangote Refinery.
The corporation’s spokesperson, Olufemi Soneye, confirmed that trucks were being stationed at the refinery’s fuel loading gantry. “By the end of today (Saturday), at least 300 trucks will be stationed at the refinery’s fuel loading gantry,” Soneye stated.
