Marketers Predict Dangote Petrol Price at ₦600/Litre

Independent petroleum marketers in Nigeria are anticipating that the Dangote Petroleum Refinery will offer Premium Motor Spirit (PMS), commonly known as petrol, at a price range of ₦600 to ₦650 per litre once it enters the market.

Representatives from the Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed optimism that the Dangote refinery could drive down the price of petrol, similar to its impact on diesel prices.

In an interview on Monday, IPMAN’s National Vice President, Hammed Fashola, stated that the $20 billion refinery has the potential to reduce fuel costs, provided it receives necessary support, particularly in terms of crude oil supply.

Fashola highlighted the current challenges faced by marketers, noting that while the Nigerian National Petroleum Company Limited (NNPCL) sells petrol to marketers at ₦570 per litre, many IPMAN members are forced to purchase from private depot owners at prices exceeding ₦700 per litre.

“We are marketers; we always seek the best deals. While we’ve been sourcing from NNPCL, if Dangote offers a more favorable price, we will take it. It all depends on the pricing,” Fashola explained.

He added, “The official NNPCL price is around ₦570 per litre, but third-party private depots are selling to our members at ₦700 or more. Ideally, we hope Dangote can offer petrol at ₦600 to ₦650 per litre, which would still be acceptable. However, this depends on Dangote’s production costs. We must be realistic—NNPCL pricing includes elements of subsidy or what they now term under-recovery, suggesting there might be hidden costs involved.”

On the subject of diesel, Fashola recalled the positive impact of the Dangote refinery on diesel prices. “When the refinery began operations, diesel prices dropped from around ₦1,600 to as low as ₦1,000 per litre. Currently, diesel is available at ₦1,150 to ₦1,200 per litre. We hope for a similar trend with PMS, but the ongoing crude supply issues present a significant challenge. Even if Dangote purchases crude in naira, if it’s priced according to the international market, the difference may be minimal. We have to be realistic,” he emphasized.

Fashola also mentioned that IPMAN has been in discussions with Dangote Refinery officials regarding a potential partnership. “The discussions are ongoing, and we are making progress. We expect to conclude soon and are waiting on Dangote’s next move,” he said.

It is worth noting that Alhaji Aliko Dangote, President of the Dangote Group, had previously announced that the refinery would begin petrol production between August 10 and 12, 2024. However, the 650,000 barrels-per-day capacity refinery has yet to commence petrol production, with sources indicating that the ongoing crude supply crisis may be a contributing factor to the delay.