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Oil marketers have raised concerns regarding the pricing of petrol by the Nigerian National Petroleum Company Limited (NNPC), asserting that the price of fuel from Dangote's local refinery should not surpass that of imported fuel.
On Monday, representatives from the Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed that it is unreasonable for NNPC to offer petrol sourced from the Dangote refinery at a higher price than that of imported alternatives.
John Kekeocha, IPMAN’s National Welfare Officer, articulated on Channels Television that if NNPC is selling Dangote's product at a premium compared to imported fuel, it undermines the rationale behind the current pricing structure. “What is there to celebrate if imported products are cheaper?” he questioned.
Last Sunday, NNPC commenced the distribution of petrol from the Dangote Refinery, indicating that the cost per litre from the private refinery was N898.
On Monday morning, the national oil company published estimated petrol prices from the Dangote Refinery for its retail outlets nationwide, clarifying that, according to the Petroleum Industry Act (PIA), petrol prices are determined through negotiations between involved parties rather than being set by the government.
“The NNPC confirms that it is compensating Dangote Refinery in USD for the September 2024 PMS offtake, with Naira transactions set to begin on October 1, 2024.
“The NNPC also stated that if there are any disputes regarding the pricing, it would welcome any discounts from the Dangote Refinery, which would be fully passed on to the public,” the statement concluded.
The NNPC has indicated in the attached document that the price of fuel from the Dangote refinery will be set at N950.22 per litre in Lagos, N960.22 in Oyo, N980.22 in Rivers, N992.22 in Abuja, N999.22 in Kaduna, N999.22 in Kano, N999.22 in Sokoto, and N1,019 in Borno, following the pricing template established for September.
According to the breakdown provided, the base price from the Dangote refinery is N898.78. Additional costs include N15 per litre for distribution within Lagos, an inspection fee of N0.97, and a NMDPRA fee of N8.99, along with an anticipated margin of N26.48.
Prior to the petrol lift from the Dangote Refinery on Sunday, NNPC retail stations in Lagos were selling petrol at approximately N855 and N897 in Abuja.
However, the Dangote Refinery has refuted the claim that it sold petrol to the NNPC at N898. Anthony Chiejina, a spokesperson for the refinery, characterized the NNPC's assertion as “misleading and mischievous” in a statement released on Sunday.
Chiejina further noted that the products were sold to the NNPC in dollars, resulting in significant savings compared to current import costs. He emphasized that this initiative would ensure the availability of petrol in every local government area across the country, regardless of their remote locations.
In contrast, an executive from IPMAN pointed out that it was expected for the product to be relatively cheaper now that it is no longer being imported from abroad.
He contended that the fuel supplied by NNPC from Dangote cannot be more expensive than imported fuel, as it benefits from significantly reduced supply logistics costs.
“The products we expect to receive from the Dangote refinery should not exceed the cost of imported fuel due to our logistical advantages,” he stated.
“If the price of petrol from the Dangote refinery is set at N950 per litre without government intervention, it suggests that the issue of under-recovery may soon be resolved, potentially allowing Nigerians to access cheaper fuel,” he further explained.
In the meantime, NNPC has revised certain aspects of the nationwide petrol pricing document it issued earlier on Monday.
While the projected petrol prices across the country remain unchanged, NNPC has modified the details regarding its transaction with Dangote Refinery.
Investigations by THISDAY revealed discrepancies between the initial press release and the subsequent one. For instance, the fee listed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) was N8.99 in the first statement, while the revised document indicated N4.495.
Additionally, the initial statement included an inspection fee of N0.97, a margin of N26.48, and a distribution fee of N15, whereas the second statement omitted the inspection fee and margin, adjusting the distribution and logistics fee to N42.45.
Furthermore, the revised statement introduced an additional Midstream and Gas Infrastructure Fund (MDGIF) charge of N4.495. This fund is established by the government to finance infrastructure projects aimed at enhancing transportation, processing, and utilization within the sector.