KEY POINTS
- Nigerian marketers seek direct access to Dangote refinery’s fuel supply.
- NNPC secures exclusive rights to purchase petrol from the refinery for now.
- Dangote refinery’s petrol is priced at N766 per liter for NNPC.
Nigerian marketers are calling for direct access to petrol from the Dangote refinery, expressing concerns over the Nigerian National Petroleum Corporation Limited’s (NNPC) stronghold on fuel distribution.
This call for a more open market was emphasized by the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, who argued that the industry should operate on a willing-buyer, willing-seller basis.
While the NNPC had initially indicated that it was not the sole off-taker of products from the Dangote refinery, the government recently confirmed that the national oil company would indeed be the exclusive buyer of petrol for now.
This move has raised concerns among independent marketers and industry stakeholders.
Government confirms NNPC’s exclusive deal
During a press briefing in Abuja, Finance Minister Wale Edun confirmed that the NNPC would begin receiving petrol from the Dangote refinery starting September 15, 2024.
According to Punch, the refinery is expected to supply an initial 25 million liters per day. Edun also announced that from October 1, 2024, the NNPC would begin paying for crude oil in naira, while the refinery would supply fuel and diesel of equal value for the domestic market.
Despite this arrangement, independent marketers, such as Ukadike, are calling for a more liberalized market, allowing them direct access to the refinery’s products without having to rely solely on the NNPC.
Ukadike commented, “The market should be open for all, in line with the willing-buyer, willing-seller principle. We are also exploring ways to establish our logistics and set our prices independently.”
Concerns over monopoly
Some industry stakeholders fear that this arrangement could create a domestic monopoly, which could further complicate the already competitive oil and gas sector.
The National President of the Petroleum Products Retail Outlets Association of Nigeria (PETROAN), Billy Gillis-Harry, voiced concerns about the potential dangers of such a monopoly.
“We do not know what the price might be, as there has been little transparency. We have asked for clarity on the pricing structure, but we have not received any information,” said Gillis-Harry.
He warned that the NNPC’s control could shift from importation to a domestic monopoly, which could harm competition within the industry.
The Dangote refinery has not yet provided independent marketers with pricing details. For now, they will need to purchase petrol through the NNPC.
Dangote petrol price and NNPC truck mobilization
Reports indicate that the Dangote refinery will sell petrol to the NNPC at N766 per liter, although the final retail price is yet to be determined.
Some industry officials speculate that, once transportation and other costs are factored in, the price could rise to N790 per liter in Lagos and N820 in the northern regions.
On Saturday, the NNPC mobilized 300 trucks to the Dangote refinery in preparation for the official loading of petrol.
The corporation confirmed that it had made arrangements to lift the product using both trucks and vessels to distribute it to various depots across the country.
