One week after the President of Dangote Group, Aliko Dangote, presented the first sample of Premium Motor Spirit (PMS), commonly known as petrol, from the Group’s 650,000-capacity refinery, with a promise that the product would hit the market in 48 hours, that promise has yet to be kept.
The public presentation of the petrol sample was done last Tuesday in a live broadcast from the refinery in Ibeju-Lekki area of Lagos State.
21st CENTURY CHRONICLE reports that Nigerians who had hoped that petrol from the Dangote Refinery would ease the suffering of the motoring public, still eagerly await the product one week later, amidst high cost of the commodity.
On the heels of the presentation by Dangote, last Tuesday, the pump price of petrol which ranged between N600 and N700/litre was jerked up to between N855 and N897/litre by the Nigerian National Petroleum Company (NNPC) Limited at its retail outlets, while some independent dealers hiked their prices to above N1,000/litre.
In some states, the product is being sold for N1,200 per litre at petrol stations while black market prices are even higher, as much as N1,500 per litre.
Following the presentation last week, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) disclosed in a statement on its X page that Dangote oil refinery will supply a total of 25 million litres of petrol to the Nigerian market daily starting from September, with the volume of supply projected to rise to 30 million litres from September.
The Dangote Group had also said the NNPC Limited would be the sole buyer of the commodity and would also determine its price.
Vice president at Dangote Industries Limited, Devakumar Edwin, was also quoted in reports to have said that the NNPC Limited is ready to purchase its products exclusively to meet local demands.
Nigerians had expressed concern over the decision of the Dangote Group to make the state-owned oil company the sole buyer of the much-awaited petrol, pointing out that it was monopolistic and in violation of the provisions of the Petroleum Industry Act.
Last Thursday, which was 48 hours after the product unveiling, the Dangote group said its petrol was yet to hit the market as promised because the NNPC Limited had yet to commence lifting from its refinery as it was yet to finalise its contract with the NNPC.
However, NNPC Ltd on Saturday said it is not the sole off-taker of all products from the Dangote Refinery and that the refinery is free to sell its petrol to any marketer.
Chief corporate communications officer of NNPC Ltd, Olufemi Soneye, disclosed this in a statement.
According to the NNPC, the pricing of petroleum products from any refinery, including the Dangote Refinery, is determined by global market forces.
It further noted that the recent changes in petrol prices have no impact on Dangote Refinery or any other domestic refinery’s access to the Nigerian market.
It added that 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 Dangote Refinery Limited,” the NNPC Ltd added.
Soneye said the NNPC Ltd will only fully offtake petrol from the Dangote Refinery if the market prices of petrol are higher than the pump prices in Nigeria and that the Dangote Refinery 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.
He added that 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.
While the waiting persists, a report by Bloomberg last week indicated that Dangote Petroleum Refinery will determine the price of petrol from October.
Bloomberg reported last Thursday that the federal government is considering allowing the refinery to set the price of its petrol.
Meanwhile, there are indications that the Dangote refinery may resort to exporting petrol following the refusal of the NNPC Limited to be the sole buyer.
Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, had said in an interview on Brekete Family show that Dangote petrol would be exported if the NNPC and other petroleum dealers in the country refused to patronise it.
According to him, “there has been a kind of a blockade from lifting our products within the country… 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.”
However, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has said it is ready to buy petrol from the Dangote Refinery.
Members of IPMAN own about 80 per cent of the filling stations in Nigeria, especially in rural communities.
National President of the association, Abubakar Maigandi, was quoted in a report to have said that: “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.”
