Dangote refinery should sell petrol below N800/litre – Marketers
According to the Independent Petroleum Marketers Association of Nigeria, the Dangote Petroleum Refinery ought to offer Premium Motor Spirit (petrol) for less than the N825 per liter that the Lekki-based facility currently charges.
In an interview with our correspondent, IPMAN Publicity Secretary Chinedu Udadike said the refinery possessed the enabling conditions needed to sell gasoline at a lower price than its present ex-depot pricing.
Ukadike was responding to remarks made by Aliko Dangote, the president of the Dangote Group, that the refinery helped keep fuel prices down to the point that Nigerians now pay roughly 55% less for gasoline than other West Africans.
Dangote recently informed President Bola Tinubu and ECOWAS officials that the Federal Government's naira-for-crude strategy has improved the cost of refined petroleum products.
Though Ukadike agreed that the current petrol price was cheaper than what other West African states paid, he said the product should be far cheaper in Nigeria, selling for about N750.
According to him, many of these West African countries do not produce crude oil, nor do they have refineries that process crude in local currencies.
“I agree that petrol is cheaper in Nigeria than in other West African countries. Notwithstanding, those African countries Dangote was comparing us with are not crude oil-producing countries.
“We’re a crude oil-producing state. PMS should be far lower as the President has also decided to give him crude in naira. So, most of the foreign exchange brouhaha and the exchange costs (are no more there), we should also enjoy it as Nigerians,” he said.
Ukadike said what Dangote had conquered for Nigerians was the issue of fuel scarcity, which used to cause queues at filling stations. He called on the Federal Government to strengthen the naira to make fuel more affordable.
“What I believe he (Dangote) has conquered for Nigerians is availability. On price, we’ll still get there. Once the government works very hard to ensure that the rate of naira to the dollar is reduced and the strength of our naira is stable, you’ll find out that the price will go down. This is another factor that determines the price of petroleum products,” he noted.
Asked if he meant that Dangote’s petrol was not cheap enough, he replied, “Well, I’m not saying it’s cheap enough in line with the facilities, amenities and the enabling environment that have been given to him.
“For me, I don’t feel it’s cheap. I think the petrol will go as low as around N770. That’s my own permutation. I’m not an expert in oil refining. But with what I have gathered — the refinery production costs and the landing at the depot cost — petrol should not be more than N780, N750, in line with the dollar rate.
“So, if the Federal Government can ensure that we continue to strengthen the naira, I believe that the price of petroleum products will go down further. What is keeping it up now is the exchange rate,” he posited.
The independent marketer predicted that if the naira appreciated to N1,100 against the dollar, petrol should be sold below N750 per litre.
“I don’t know how much the dollar will go down, so I cannot forecast. The dollar is around N1,600 now. So, if the dollar can come down to N1,200, I want to tell you that the price of PMS at the pumps will go below N750,” he added.
Dangote told ECOWAS leaders last week that the majority of Nigerians were not aware that their petrol costs were 55% of those of other West African nations.
Dangote said that by selling gasoline for between N815 and N820 per litre, his refinery has contributed to the drop in fuel costs.
During a visit to the 650,000 barrels-per-day facility by Dr. Omar Touray, President of the Economic Community of West African States Commission, and his team, the billionaire businessman made this statement.
Dangote emphasized how the refinery has assisted Nigeria in lowering the cost of refined products and production costs across numerous economic sectors, pointing out that Africa would gain a great deal by promoting commerce among its nations.
We were able to lower the price of diesel from N1,700 to N1,100 all at once when we started manufacturing last year, but as of right now, the price has fallen even further. Numerous sectors have been significantly impacted by this decline. It has helped the mining industry, supported industries, and given the agricultural sector much-needed relief. "The impact has been enormous," he stated.
He also emphasized how domestic refining was helping Nigerians because the price of gasoline had fallen considerably as compared to its neighbors.
“In neighbouring countries, the average price of petrol is around $1 per litre, which is N1,600. But here at our refinery, we’re selling at between N815 and N820. Many Nigerians don’t realise that they are currently paying just 55 per cent of what others in the region are paying for petrol,” he noted.
Dangote reaffirmed that the naira-for-crude agreement helped him continuously lower gasoline costs during Tinubu's tour of the refinery on Thursday. But according to a recent S&P Global study, the refinery's fuel costs were high in comparison to the decline in crude prices.
As of the filing of this report, Tony Chiejina, the refinery's representative, has not responded to IPMAN's comments.
