Market News

BY Okechukwu Nnodim and Dare Olawin

Oil marketers are concerned about the delay in announcing the price of Premium Motor Spirit, popularly called petrol, being produced by the Dangote Petroleum Refinery, as they noted that the landing cost of imported PMS is now about N1,120/litre.

Dealers stated that a high PMS price from the Dangote refinery would lead to the importation of the commodity by marketers since the government has opened up the market for competition.

In July this year, the Major Energies Marketers Association of Nigeria revealed that the landing cost of PMS was N1,117/litre. The landing cost is simply the price at which the commodity lands on Nigeria’s shores.

While the pump prices of petrol ranged between N600 and N700/litre in July, the cost was raised last week to between N855 and N897/litre by the Nigerian National Petroleum Company Limited, while some independent dealers hiked their prices to above N1,000/litre.

It was also gathered on Monday that the delay in the release of the price of Dangote petrol had further made oil marketers deepen discussions with their foreign partners in a bid to start petrol imports.

The National President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, stated that IPMAN was speaking with its partners abroad while awaiting Dangote petrol price, but noted that a high cost from Dangote would lead to massive PMS importation.

“On the landing cost of petrol, we are waiting for our foreign partners to calculate how much it will cost to bring the product to Nigeria. This is so that independent marketers will also see how to import the commodity. So we are waiting to get the data from them.

“I’ll tell you the actual landing cost once we get the data from our foreign partners. So if the landing cost is cheaper than what the Dangote refinery will sell, then we will see how to bring in the product.

“You know, it is now an open market, so anywhere we see a cheaper rate with good quality, we will buy from there. We don’t know the price of Dangote PMS. We are waiting for the refinery to release the price. However, we are discussing it with our foreign partners,” he said.

Maigandi explained that allowing multiple importers of the PMS would ensure availability and competition.

“One advantage of allowing everyone to bring in the product is that there will be guaranteed availability of products.

“There is also going to be competition. Once this happens, everybody will try to see how they can sell their products and buy another one. It is only when you sell what you have that you can generate profit,” he stated.

Dangote petrol price

An official of the Dangote Group said the President of the group, Alhaji Aliko Dangote, will do everything possible to beat down the price of petrol.

The official who preferred not to be mentioned because he was not authorised to speak on the matter, said Dangote would sell PMS in Nigeria whether or not the Nigerian National Petroleum Company Limited agrees to be its off-taker or not.

According to the source, Aliko Dangote is a nationalistic man who loves the country, and he is ready to make sacrifices for the sake of the masses.

He recalled how the refinery brought down the price of diesel from about N1,600 to N950 before it started hovering around N1,100 and N1,200 due to foreign exchange fluctuations.

“When we started diesel, the product was around N1,700. We crashed the price to N1,200 and later, N950, before it now hovers around N1,100 and N1,200. Those who were milking the nation with dirty diesel saw it and they reduced their cost too. We will do it again,” the source stated.

Asked if Dangote can sell his PMS locally in the face of the seeming refusal of the NNPC to work with the refinery, the source replied, “Why not? We are going to sell locally; Alhaji Aliko Dangote is a nationalistic Nigerian; he loves this nation, and he is ready to make sacrifices.

‘We will bend for the country. We have high-quality PMS for the country. Some people who are importing fuel and some owners of refineries and blending plants in foreign countries don’t want this to happen. Their $117bn shipping business to West Africa is at stake.”

When the official was asked to disclose when the PMS will be out, he said, “Don’t worry, we are on course. We are ‘talk and do’. When we talk, we make it happen.”

The official, however, mentioned that the Dangote Group is still waiting to hear from the NNPC, but will take its decision if the state-owned company refuses to work with it.

The PUNCH reports that the NNPC and the Dangote refinery have yet to agree on the modalities for the sale of the latter’s PMS.

The NNPC, in a statement by its spokesman, Olufemi Soneye, said on Saturday that it would not buy Dangote PMS unless it is cheaper than that of the international market.

This is contrary to claims by Aliko Dangote that the refinery was waiting for the NNPC to roll out its product.

The NNPC also declared that Dangote and any other domestic refineries are free to sell directly to any marketer on a willing buyer, willing seller basis, saying it has no desire or intention to become the distributor for any entity in a free market environment.

“The recent changes in PMS prices have no impact on the 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.

Soneye stated that the Dangote refinery could lower its price if it felt the new prices were too high.

“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 off-take PMS from the DRL if the market prices of PMS are higher than the pump prices in Nigeria,” the NNPC said.

Our correspondent reports that this statement from the NNPC is an indication that the NNPC is not ready to stop importation, especially as its refineries have yet to become operational.

Since the unveiling of its PMS, the NNPC appeared to have turned its back against the Dangote refinery.

While unveiling the 650,000-capacity refinery, Aliko Dangote, stated that the facility would roll out petrol whenever the NNPC was ready.

Dangote disclosed that the petrol would get to the filling stations in the next 48 hours (from Tuesday) after all arrangements with the NNPC were concluded, saying the queues will be over soon.

The group president emphasised that the NNPC is the company that would sell and distribute the product, under the current naira crude sale arrangement.

“Once the NNPC is ready, we roll,” Dangote emphasised.

But it seems the talks between the two companies have collapsed and this means fuel importation will continue to gulp N2tn every month, perhaps until the government refineries are fixed.

In the past few days, the NNPC has in different statements denied that it would fix the price for Dangote or be its sole distributor.

This was after the state-owned energy firm said it was given a September 15 timeline by the refinery to lift its petrol, a claim the Dangote official denied.