Petrol prices should crash to about N300 per litre when mass production by the Dangote Petroleum Refinery and other refineries begins production.
The pump price of Premium Motor Spirit, popularly called petrol, should drop to about N300/litre upon the commencement of massive production by the Dangote Petroleum Refinery and other indigenous producers, operators of modular refineries stated on Sunday.
However, they pointed out that this would be achieve when
the government ensures the provision of adequate crude oil to local refiners,
stressing that refineries abroad were ripping off Nigeria.
Speaking under the aegis of the Crude Oil Refinery Owners
Association of Nigeria, they explained that what happened to the cost of diesel
after Dangote started producing it, would happen to petrol price once it is
being produced massively in Nigeria.
CORAN is a registered association of modular and
conventional refinery companies in Nigeria.
“A lot of companies today benefit from the importation of
petroleum products at the expense of Nigerians,” the Publicity Secretary,
CORAN, Eche Idoko, stated.
He told our correspondent that “if we begin to produce PMS
today in large volumes, provided there is adequate crude oil supply, I can
assure that we should be able to buy PMS at N300/litre as the pump price.
“Why make Nigerians buy it at almost N700/litre when you
know that if you allow refineries work the price will come down? Is it because
you want to satisfy the global refiners abroad that are making so much from
us?”
When told that there are arguments that it is not possible
to have such a drop in price because crude oil, the raw material for PMS, is
price in dollars, the CORAN official insisted that petrol price would crash
once it is being produced massively by indigenous refiners.
He said, “We were selling diesel for N1,700 to N1,800/litre,
but as soon as Dangote refinery started production he brought down the price to
N1,200/litre. What other proofs do you need?
As I speak to you now there is every tendency that before
December diesel price will drop further. The only reason reason why diesel is
not doing below N1,000/litre is because of our exchange rate.
“If the exchange rate drops, diesel will drop below the
N1,000/litre price. Now the exchange rate concern is because Dangote imports
crude. If he is not importing, the exchange rate may not have so much effect,
though he is still buying crude in dollars (in Nigeria) anyway.”
Africa’s richest man,
Aliko Dangote, stated that following the laid-down plans of the Dangote
refinery, Nigeria would no longer need to import petrol starting June this
year.
Dangote had also stated that his refinery could meet West
Africa’s petrol and diesel needs, as well as the continent’s aviation fuel
demand. He spoke at the Africa CEO Forum Annual Summit in Kigali, expressing
optimism about transforming Africa’s energy landscape.
“Right now, Nigeria has no cause to import anything apart
from gasoline (petrol) and by sometime in June, within the next four or five
weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a
litre,” the billionaire had declared.
Also, Dangote had earlier in the year crashed the pump price
of diesel to N1,200/litre when the commodity was selling at between N1,700 and
N1,800/litre at the time.
He further dropped the price to below N1,000/litre, but
could not sustain this price due to the rise in exchange rate. The refinery
eventually returned the price to the initial rate of N1,200/litre.
Speaking on Sunday, the CORAN spokesperson stated that this
was why the modular refiners had been calling for the sale of crude oil at the
naira equivalent of the dollar rate.
“We have told them (government) that even the dollars that
you are asking us to use and buy this product, it is detrimental to the
country. Strengthen the naira. We will buy at the international market rate,
but at a naira equivalent.
“These are the issues and they know these things but we
can’t explain why they really can’t take decisions to change these concerns.
“Get crude to local refineries, allow crude purchase in
naira equivalent, make the environment business-friendly and watch locally
produced petroleum product prices crash,” Idoko stated.
Nigeria currently has 25 licensed modular refineries. Five
of them are operating and producing diesel, kerosene, black oil and naphtha.
About 10 are under various stages of completion, while the others have received
licences to establish.
Operators of modular refineries earlier stated that aside
from the five that are in operation currently, the remaining plants are
embattled due to the major challenge of crude oil unavailability, a development
that has stalled funding from financiers.
“Only about five of our members have completed their
refineries. The others are having a major challenge.
“This challenge is that the people who are supposed to
finance them have not disbursed financing for construction because they want
some level of guarantee.
“A guarantee that if they finish the refinery, they are
going to get feedstock, which, of course, is crude oil,” Idoko had explained.
Oil marketers also believe that the cost of petrol should be
lower than its current price once its production begins in Nigeria.
They welcomed the comment of Dangote that his refinery
should start pumping out petrol this month, and expressed hope that the cost
would be less than the price which the Nigerian National Petroleum Company
Limited currently sells.
“We expect a reduced price for locally produced PMS, as I’ve
earlier told you,” the National President, Independent Petroleum Marketers
Association of Nigeria, Abubakar Maigandi, stated.
Maigandi, while speaking from Saudi Arabia with our
correspondent on Sunday, also stated no date has been communicated to marketers
on when Dangote would release petrol to the market. Officials of Dangote
refinery have remained mute on this.
“It is a welcome development if the refinery can start
releasing PMS this month because as marketers we are currently set to start
buying the product from the plant,” Maigandi stated.
The IPMAN president earlier stated that marketers were
discussing with the managers of the plant, but not specifically on petrol
pricing.
“We have been discussing, but not about the price of petrol
yet, rather on other matters such as the registration of members for the
purchase of petrol and diesel from the refinery.
“It is true that we have started buying diesel from them,
but you have to register with the company first. So a general registration is
ongoing,” he explained.
Maigandi, however, stated that though marketers had yet to
receive the projected price for petrol from the plant, dealers would want to
see a PMS price of about N500/litre from the Dangote refinery.
“We are looking at having it (PMS) at any price below the
NNPC rate. The price which NNPC sells petrol is N565.50/litre, so we are
expecting something below that price, maybe around N500/litre,” Maigandi
stated.
The oil dealers also joined in the call for the provision of
crude oil to local refiners, stressing that this would impact positively on the
prices of refined petroleum products.
“Of course, it is important for crude to be made available
to local refineries because this will surely affect petroleum products’ prices
positively,” the IPMAN president stated.
Regulators speak
The spokesperson of the Nigerian Midstream and Downstream
Petroleum Regulatory Authority, George Ene-Ita, said he was sure that the
government has guidelines for the provision of feedstock (crude) to indigenous
refiners.
Ene-Ita promised to provide additional information on the
matter, as he stated that he could not give further details at the time he was
contacted by our correspondent.
Recall that the Chief Executive of the Nigerian Upstream
Petroleum Regulatory Commission, Gbenga Komolafe, had earlier promised that the
government would ensure that crude oil was supplied to domestic refiners.
He stated that in compliance with the provisions of Section
109(2) of the Petroleum Industry Act 2021, the NUPRC in a landmark move, had
developed a template guiding the activities for Domestic Crude Oil Supply
Obligation.
“The commission in conjunction with relevant stakeholders
from NNPC Upstream Investment Management Services, representatives of Crude
Oil/Condensate Producers, Crude Oil Refinery-Owners Association of Nigeria, and
Dangote Petroleum Refinery came up with the template for the buy-in of all.
“This is in a bid to foster a seamless implementation of the
DCSO and ensure consistent supply of crude oil to domestic refineries,”
Komolafe had stated.