Marketers Seek Direct Access to Dangote Refinery Amid NNPC’s Purchase at N766/Litre

Petroleum marketers push for a liberalized market with direct access to the Dangote refinery, as NNPC remains the sole off-taker of products

Marketers Call for Direct Access to Dangote Refinery as NNPC Locks in Deal at N766/Litre

Petroleum marketers are advocating for direct access to the Dangote Refinery, challenging the Nigerian National Petroleum Corporation’s (NNPC) exclusive control over the distribution of Premium Motor Spirit (PMS). The Independent Petroleum Marketers Association of Nigeria (IPMAN) believes the market should be open to all players in line with a willing-buyer, willing-seller agreement that was previously endorsed by the NNPC.

Despite earlier assurances, the Federal Government announced that the NNPC would be the sole buyer of petrol from the Dangote Refinery. The Minister of Finance, Wale Edun, confirmed during a press briefing that independent marketers would have to purchase from the NNPC through its trading company, solidifying the NNPC’s role in the domestic fuel market.

Concerns Over Market Liberalization

Market stakeholders, such as IPMAN’s National Publicity Secretary, Chinedu Ukadike, argue that the fuel distribution market needs to be liberalized. They are pushing for direct access to the Dangote Refinery, which they believe would create a more competitive environment and better pricing for consumers. The NNPC’s continued grip over fuel distribution raises concerns that another monopoly is forming, even on a domestic level.

Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Association of Nigeria, emphasized the risk of creating another monopoly. He expressed concerns over transparency, stating that marketers remain in the dark about pricing structures or fuel supply agreements.

NNPC Mobilizes Fuel Trucks

The NNPC is gearing up for the transportation of PMS from the Dangote Refinery, with over 300 trucks mobilized to begin lifting fuel. According to NNPC spokesperson Olufemi Soneye, the trucks are stationed at the refinery, awaiting the start of fuel distribution, which is scheduled to begin on September 15, 2024.

The Dangote Refinery will initially sell PMS to the NNPC at N766 per litre, although independent marketers are still waiting for information about pricing and distribution timelines. While the NNPC’s exclusive deal with the refinery is in place, industry leaders hope that direct access to the Dangote Refinery will become a reality soon, allowing them to negotiate their pricing structures independently.

Potential Impact on Pump Prices

With the NNPC purchasing PMS from the Dangote Refinery at N766 per litre, pump prices could see a reduction if independent marketers gain access to the refinery. Although transport costs and other margins will influence final prices, experts predict that in Lagos, prices may hover around N790 per litre, with prices reaching up to N820 per litre in northern regions due to transportation distances.

Despite the uncertainties, marketers remain optimistic that direct access to the Dangote Refinery will eventually lead to lower prices and greater market flexibility.