Independent petroleum marketers in Nigeria are forecasting that the Dangote Petroleum Refinery will price its Premium Motor Spirit (PMS), commonly known as petrol, at around N600 or N650 per litre once it begins production and distribution.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) believes that Dangote’s refinery could lower petrol prices, just as it did with diesel. In an interview on Monday, IPMAN’s National Vice President, Hammed Fashola, expressed confidence that the $20 billion refinery would reduce fuel costs, contingent on receiving adequate support, particularly concerning crude oil supply.
Currently, the Nigerian National Petroleum Company Limited (NNPC), the primary importer of PMS, sells petrol to marketers at N570 per litre. However, many IPMAN members purchase from private depot owners at higher prices, often exceeding N700 per litre.
Fashola stated, “While we’ve been buying from NNPC, if Dangote offers a favorable price, we’re ready to purchase from them. We hope the price will be between N600 and N650 per litre. N600 is acceptable, but it will depend on Dangote’s production costs. We must be realistic and acknowledge that NNPC’s pricing has a hidden element, such as subsidies or under-recovery.”
He also highlighted the price reduction in diesel, which saw a drop after Dangote’s refinery began operations. “When Dangote started refining diesel, the price dropped from about N1,600 to around N1,000 per litre. It now fluctuates between N1,150 and N1,200 per litre. We expect a similar trend with petrol, although the ongoing crude oil supply issues present a challenge. Even if Dangote buys crude in naira, international market prices may still affect costs,” he explained.
Fashola confirmed that IPMAN has been in discussions with Dangote Refinery officials about a potential partnership and remains optimistic about finalizing agreements soon.
In August, Dangote Group’s President, Alhaji Aliko Dangote, had projected that the refinery would begin producing petrol between August 10 and 12, 2024. However, delays in production have been reported, likely due to the ongoing crude supply crisis.
