Only NNPC Can Purchase Dangote Petrol, IPMAN

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has declared that no oil marketer in Nigeria, except the Nigerian National Petroleum Company Limited (NNPC), will buy Premium Motor Spirit (PMS) from the Dangote Petroleum Refinery at the current pump prices.

On July 15, 2024, The PUNCH reported that Alhaji Aliko Dangote, President of Dangote Industries Limited, announced that the $20 billion refinery would begin selling its petrol in August 2024 after resolving crude oil supply issues with the help of NNPC and the Federal Government. Dangote stated that production would start in July, with sales beginning in August, projecting annual revenue to exceed $26 billion.

However, oil marketers informed our correspondent that no dealer in Nigeria would buy petrol from the Dangote refinery as it would be priced at international market rates, significantly higher than domestic prices. The Deputy National President of IPMAN, Zarma Mustapha, confirmed there had been no official communication about the petrol pricing from the Dangote refinery. He emphasized that PMS from the refinery would be sold at international rates, which no marketer is currently willing to pay.

Mustapha explained that the Dangote refinery, being a commercial entity, would need to recover its refining costs and add a margin before selling the product. The current domestic price of petrol is below the international rate, making it unfeasible for marketers to buy from the refinery and sell at existing pump prices without incurring significant losses.

For Dangote petrol to be available at filling stations across Nigeria, Mustapha suggested that NNPC might need to intervene by purchasing the product and reselling it to marketers at discounted rates. He noted that without such intervention, no marketer could afford to sell the product without incurring losses of N400 to N500 per litre.

On July 18, 2024, The PUNCH reported that the landing cost of petrol was N1,117 per litre as of July 16, 2024, according to data from the Major Oil Marketers Association of Nigeria (MOMAN). MOMAN also disclosed the landing costs of diesel and aviation fuel were N1,157 and N1,127 per litre, respectively. The landing cost of petrol is significantly higher than the current pump price in Nigeria, which ranges from N660 to N800 per litre.

When asked if major marketers could buy petrol from the Dangote refinery, MEMAN Executive Secretary Clement Isong referred to the realistic cost of PMS published by the association, noting that the Dangote refinery would not sell at a loss.

Currently, NNPC is the sole importer of petrol into Nigeria, as other marketers have stopped importing due to difficulties in accessing US dollars. NNPC had not responded to enquiries on the matter at the time of this report.

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