The Dangote Refinery has indicated that it may opt to export its Premium Motor Spirit (petrol) if the Nigerian National Petroleum Company Limited (NNPCL) continues to refuse to be the sole buyer of its product.
NNPCL has stated that it will only purchase Dangote’s petrol if its market price is lower than the current domestic pump prices. This condition contradicts claims made by Aliko Dangote, the President of the Dangote Group, that the refinery was awaiting NNPCL’s readiness to lift its product.
NNPCL has clarified that domestic refiners, including Dangote Refinery, are free to sell directly to any marketer. The company emphasized that it has no intention of becoming a distributor in a free market environment.
The company was reacting to a press release by the Muslim Rights Concern, which claimed that the Dangote refinery was being undermined by the NNPC.
MURIC stated that recent changes to the pump price of petrol by the NNPC would prevent the refinery from offering lower prices, and that the corporation had become the sole offtaker of all products from the refinery.
Responding, the NNPC said, “The pricing of petroleum products from any refinery, including Dangote Refinery Limited, is determined by global market forces.
“The recent changes in PMS prices have no impact on DRL or any other domestic refinery’s access to the Nigerian market. In fact, if current prices are perceived as high, it presents an ideal opportunity for the refinery to sell its products at lower prices in the Nigerian market.
“Furthermore, we emphasise that there is no guarantee of lower prices associated with domestic refining compared to any global parity pricing framework, as confirmed by the DRL. The NNPC Ltd will only fully offtake PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria. The DRL and any other domestic refinery are free to sell directly to any marketer on a willing buyer, willing seller basis, which is the current practice for all fully deregulated products. NNPC Ltd has no desire or intention to become the distributor for any entity in a free market environment, and therefore, the notion of becoming a sole off-taker does not arise.”
Soneye added that the NNPC could not undermine a business in which it held a billion-dollar investment.
Dangote Refinery Awaits NNPCL for Petrol Rollout
Aliko Dangote, the President of the Dangote Group, announced during the unveiling of the 650,000-capacity Dangote Refinery on Tuesday that the facility would begin producing petrol once the Nigerian National Petroleum Company Limited (NNPCL) was ready.
Dangote anticipated that petrol would reach filling stations within 48 hours of finalizing arrangements with NNPCL, suggesting a swift resolution to the ongoing fuel scarcity.
“Our PMS can be in filling stations within the next 48 hours, depending on NNPCL,” he said.
He spoke further, “We are ready. I pray that within the next few days, you won’t see any petroleum queues as soon as we finalise with NNPC. We are ready, we are waiting for them (NNPC) and I hope they will be ready like yesterday.”
Dangote told newsmen that he could not disclose the price of the petrol because the NNPC was in a position to control it.
“On the pricing, I can’t say anything because we don’t control the pricing. At the moment, it is controlled by NNPC, not Dangote. We will wait for them. But, our own for now is to make sure that the product is available and round-tripping is stopped,” he noted.
The businessman emphasised that the NNPC was the company that would sell and distribute the product under the current naira crude sale arrangement.
“Once the NNPC is ready, we roll. We are even ready to load a ship this week,” he added.
Dangote Refinery Considers product Export
The negotiations between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL) appear to have stalled, potentially leading Dangote Refinery to export its Premium Motor Spirit (petrol) instead of selling it domestically.
While NNPCL has repeatedly denied fixing prices for Dangote or acting as the sole off-taker, the refinery has yet to commence production. This has raised questions among Nigerians about NNPCL’s decision to increase the pump price of petrol on the same day Dangote Refinery unveiled its product, especially after months of implicit subsidy payments.
The masses, who were hopeful that the Dangote fuel would crash the price of petrol, may be losing hope.
Speaking on the Brekete Family live show on Monday, the Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, said Dangote petrol would be exported if the NNPC and other petroleum dealers in the country refused to patronise it.
Asked if the petrol would be sold locally, Edwin replied, “There has been a kind of a blockade from lifting our products within the country. The traders have been trying to blockade, and so now, we have been exporting our petroleum products. We are ready to pump in PMS as much as possible to the country.
“But if the traders or NNPC are not buying the product, obviously we will end up exporting the PMS as we are doing with the aviation jet and diesel,” he declared.
Edwin expressed surprise that the company started facing challenges it never expected when the refinery was set to commence operations.
He recalled that the philosophy initially was to add value to the raw materials available in the country, regretting that Nigeria was still exporting crude and importing refined petroleum products after over three decades.
Despite having a gantry that can load 2,900 tankers per day, Edwin disclosed that the refinery had not loaded up to five per cent of the gantry’s capacity owing to low local patronage.
In an interview with our correspondent, a professor of Economics at the University of Ibadan and President of the Nigerian Economics Society, Adeola Adenikinju, advised that the government and the NNPC should buy PMS from the Dangote refinery instead of importing from another country.
“Dangote refinery is a private business; he will export to where he can make money. He cannot be subsidising our economy. It is still going to be cheaper for the NNPC to buy from Dangote than to import from Europe. Dangote has to run the business and pay his debts, he can’t subsidise us,” Adenikinju noted.
IPMAN Ready to Purchase Petrol from Dangote Refinery
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has expressed its willingness to purchase Premium Motor Spirit (PMS) from Dangote Refinery, regardless of NNPCL’s decision. IPMAN’s National President, Abubakar Maigandi, stated that independent marketers are prepared to patronize Dangote Refinery.
“Whatever the case, if Dangote starts selling his product, we are going to patronise him; if at all he wants to do business with us.
“We are ready to buy at any price because the NNPC is saying that they don’t want to involve themselves in fixing prices. So, at any price that he wants to sell, we are ready to buy and discharge and sell at a good price,” Maigandi stated.
Members of IPMAN own about 80 per cent of the filling stations in Nigeria, especially in rural communities.
On Thursday, the NNPC also said it was waiting for a September 15 timeline given to it by the refinery.
However, the latest comments from the NNPC indicate all is not well with the negotiations between the two companies.
The spokesman for the Dangote Group, Anthony Chiejina, did not answer calls or reply messages sent to him by our correspondent on Saturday.
Fuel Scarcity and Price skyrocket in Benue
The ongoing fuel scarcity in Benue State has led to a surge in black market activities. In Makurdi, the state capital, numerous filling stations have closed operations, leaving motorists reliant on black marketers.
The price of Premium Motor Spirit (PMS) has skyrocketed in the black market, reaching between N1,300 and N1,400 per liter.
This drastic increase has resulted in reduced vehicular movement, soaring transportation fares, and many resorting to walking.
The closure of filling stations and the emergence of black markets have exacerbated the hardships faced by residents of Benue State.
Fuel Scarcity Continues in Ondo and Ekiti States
Despite assurances from the Minister of State for Petroleum Resources, Heineken Lokpobiri, that fuel availability would improve by the weekend, the situation in Ondo and Ekiti States remains challenging.
In Akure, Ondo State, many filling stations remain closed due to a lack of fuel. NNPC stations with available fuel are experiencing long queues. Additionally, some independent marketers are selling petrol at prices ranging from N950 to N1,100 per liter.
In Ekiti State, while several filling stations are dispensing petrol, a few still lack the product. The price at stations with fuel ranges from N950 to N1,200 per liter.
Long queues of vehicles were at the few stations selling the product at between N950 and N960 per litre.
A self-employed man, Mr Abel Olode, who said he bought some litres of petrol for N960 per litre on Friday, said, “I parked the car at home and boarded a motorcycle to my place of work today. Using it daily will drain my finances.”
Filling stations belonging to major marketers in Ogun State sold fuel for between N868 and N890 per litre, while independent marketers sold for between N950 and N1,200 per litre.
The NNPC outlets, however, sold at N865 per litre.
A motorist, Adeolu Bashir, said, “Nothing has changed with the fuel situation. The independent marketers are selling the fuel for N1,200; meanwhile, not many of the filling stations are selling the product.”
As of September 7, 2024, independent marketers in Ibadan, the Oyo State capital, were dispensing fuel at N1,100 and N1,200 per litre. There were no long queues in most of the filling stations in the city
Long queues still persisted in most of the filling stations in Zamfara State, despite the hike in fuel price.
Most of the filling stations, controlled by IPMAN in Gusau town and other parts of the state, were selling a litre of fuel between N1,100 and N1,150.
There was no fuel in all the mega stations visited by Sunday PUNCH as of the time of filing this report.
Despite the scarcity of PMS in some states, the product seemed to be available in most filling stations across the 13 LGAs of Nasarawa State, on Saturday, it was observed that there were no queues.
The price of Premium Motor Spirit (PMS) has surged to N1,100 per liter in several local government areas of Nasarawa State, including Obi, Awe, Keana, Doma, Toto, and Nassarawa Eggon.
Filling stations such as Sandaji, Hayattu, Alh Dauda Muhammadu, Nagoda, and Rainoil are selling PMS at N990 per liter. However, black market dealers are charging between N1,200 and N1,400 per liter in various locations across the state.
A black market dealer, Musa Inusa, revealed that obtaining fuel has become increasingly challenging due to strict restrictions and rising prices.
This article was written by Tamaraebiju Jide, a student at Elizade University
