Independent petroleum marketers in Nigeria anticipate that the Dangote Petroleum Refinery will sell Premium Motor Spirit (PMS), commonly known as petrol, at a price range of N600 to N650 per litre once it enters the market. The marketers, operating under the Independent Petroleum Marketers Association of Nigeria (IPMAN), express optimism that the Dangote refinery will reduce petrol prices, mirroring its impact on the diesel market.
In an interview on Monday, IPMAN National Vice President, Hammed Fashola, highlighted the potential of the $20 billion refinery to lower fuel costs, provided it receives adequate support, particularly concerning crude oil supply.
“The Nigerian National Petroleum Company Limited (NNPCL), currently the sole importer of PMS, sells to marketers at N570 per liter. However, most IPMAN members purchase petrol from private depot owners at prices exceeding N700 per liter,” Fashola explained.
“As marketers, we always seek the best options. While we currently buy from the NNPCL, if Dangote offers a more favorable price, we will definitely consider it. The official price from NNPCL is around N570 per liter, but third-party private depots sell PMS to most of our members at over N700 per liter. Ideally, we hope Dangote can offer a price between N600 and N650 per liter, which is still reasonable. However, the final price will depend on Dangote’s production costs. It’s important to acknowledge that the NNPCL pricing involves some level of subsidy or what is now referred to as under-recovery,” Fashola added.
Read also: Dangote Refinery delays petrol rollout again amid crude supply concerns
Fashola also reflected on the impact the Dangote refinery has had on diesel prices. “When the refinery began producing diesel, the price dropped from around N1,600 to N1,000 per liter. Currently, diesel can be purchased at N1,150 or N1,200 per liter. We expect a similar trend with PMS, but the ongoing crude supply crisis poses a significant challenge. Even if Dangote acquires crude oil in naira, if it is priced at international market rates, the effect on the final price may be negligible. We must be realistic,” he cautioned.
The IPMAN leader also mentioned that the association has initiated business discussions with officials from the Dangote refinery regarding a potential partnership, and the marketers are eagerly awaiting the refinery’s next steps. “The discussions are ongoing, and we are making progress. We expect to conclude the discussions soon. We are waiting,” he said.
It’s worth noting that Alhaji Aliko Dangote, President of the Dangote Group, had previously projected that the refinery would begin producing petrol between August 10 and 12, 2024. However, the refinery, which has a capacity of 650,000 barrels per day, did not commence petrol production on Monday due to various challenges, including the current crude supply crisis.
