Marketers in Nigeria will purchase premium motor spirit (PMS), also known as petrol, directly from Dangote Petroleum Refinery, but they face some pricing hurdles.
This is because there is a price disparity between Dangote petrol and imported PMS.
While Dangote refinery can supply a substantial portion of Nigeria’s domestic petrol needs, the government’s strict control of petrol pricing has created a major hurdle for marketers.
Marketers from the Independent Petroleum Marketers Association of Nigeria (IPMAN) and Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have begun efforts to buy petrol directly from the $20 billion Dangote Petroleum Refinery, bypassing the Nigerian National Petroleum Company (NNPC) Limited.
At the time of filing this report, the NNPC is the sole buyer of petrol from the Lekki-based refinery. Other marketers rely on the national oil company to obtain the product from the large-scale refinery.
In a conversation with BusinessDay, IPMAN referred to the state-owned oil company as a competitor, stating that efforts are underway to meet with Aliko Dangote, president of the Dangote Group, or some senior management members of the company.
Although no specific date has been set for the meeting, IPMAN leaders stressed that purchasing directly from the refinery is the correct approach rather than buying through another marketer.
Read also: September TalkExchange poll: What’s your take on the new Dangote petrol prices nationwide?
Zarma Mustapha, deputy president of IPMAN, confirmed that buying petrol from Dangote Refinery depends on the price. “We have to look at the price and the landing cost of importation. Whichever is more attractive, we will go for it.”
Mustapha revealed that the operations of the association have been challenged by the non-availability of the products at the source.
“We mostly get the products from the NNPC, which is bringing it. The supply is not enough,” he said.
When asked the possible timing of the meeting, he replied, “We don’t know yet. The key point is that as marketers, we should also meet with the seller to determine if he is willing to sell to us since we are interested buyers.”
Explaining why the association no longer wishes to go through NNPC, he said, “This is deregulation, which creates an open market. So, it should be a case of a willing buyer and a willing seller. This is the relationship we are promoting. Why go through unnecessary steps when we can simply buy directly from Dangote?”
However, several industry sources have voiced concerns that the pricing strategy currently in place makes it difficult for independent players to compete in the market.
“We are desirous of patronising Dangote refinery and we are hoping that we will be able to discuss that,” said Billy Gillis-Harry, president of PETROAN. “But if we have other ways to also inject petrol into the system at a more affordable price, we’ll certainly want to do it. And that’s what we’re looking to do.”
Talking about the capacity to lift petrol from the Dangote refinery, he told BusinessDay that PETROAN has tens of thousands of retail outlets across the country.
Read also: Marketers yet to lift Dangote petrol from NNPC over price
“It’s very critical for him to work with us directly so that Nigerians can be the best for it.”
The landing cost of petrol has decreased to N981 per litre, as revealed by data from the Major Energy Marketers Association of Nigeria (MEMAN) last Thursday.
Before now, the cost of petrol landing hovered around N1,130 in recent weeks, but it fell by more than N140 by September 25, 2024, due to a recent decline in global crude oil prices.
“This was a decrease from the previous month, following the lower oil demand in China and announcements that the Organisation of Petroleum Exporting Countries (OPEC) were expecting to increase production,” MEMAN revealed.
IPMAN and PETROAN said both associations would continue to source petrol from other suppliers, including NNPC, if Dangote’s price is not competitive.
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