The Dangote Petroleum Refinery has reduced the price of its Premium Motor Spirit from N990 per litre to N970/litre.
This is the amount marketers will buy the product from the refinery.
In a statement released on Sunday, the Group Chief Branding and Communications Officer of the Dangote Group, Anthony Chiejina, said the reduction was to appreciate Nigerians as the year ends.
“As the year comes to an end, this is our way of appreciating the good people of Nigeria for their unwavering support in making the refinery a dream come true. In addition, this is to thank the government for their support as this will complement the measures put in place to encourage domestic enterprise for our collective well-being,” the statement read.
Chiejina said the refinery would not compromise on the quality of its petroleum products while assuring Nigerians of the best quality products that are environmentally friendly and sustainable.
“We are determined to keep ramping up production to meet and surpass our domestic fuel consumption; thus, dispelling any fear of a shortfall in supply,” the statement concluded.
Our correspondent recalls that the Major Energies Marketers Association of Nigeria (MEMAN) said on Friday that the landing cost of imported petrol is now N971/litre.
Recently, both independent and major marketers confirmed that the pump prices of petrol have started reducing in many parts of Nigeria due to the competition that the deregulation of the downstream sector has caused.
The spokesman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said the agreement between IPMAN and Dangote is gradually pushing down the price of PMS.
“By just the announcement that IPMAN and Dangote have met and are ready to transact business, the prices of products have crashed. You would have noticed the drop in prices by N10, N15, or so, and this is due to competition.
“Independent marketers are no longer buying from middlemen. We are going to be buying directly from the producer. So, the competition is setting in. I also want to tell you that before the end of this year, the price will not be as high as what you see now.
“You can see how our meeting with Dangote has significantly removed about N10 from the prices of refined petroleum products. It is a good development. We have not even started. Remember I once told you that prices would drop once IPMAN started lifting from Dangote,” Ukadike stated.
Also confirming the drop in prices, a major oil marketer stated that this was due to the deregulation of the downstream oil sector.
“People are not noticing that prices are going down, primarily because there are no big announcements. Deregulation is in full swing and competition is the order of the day,” the major oil marketer, who spoke in confidence due to lack of authorisation to speak on the matter, stated.
When told that the cost of petrol was still above N1,000/litre and was N1,070/litre in filling stations operated by his company, the dealer replied, “Last week it was N1,080 (in some filling stations) if you were observant.
“You may not see N900; that is below cost. Just stop expecting a permanent fixed price. It can come down and it can go up.”
Reacting to the price reduction, marketers described the gesture as a welcome development.
According to IPMAN, the decision by Dangote may be connected with the drop of fuel prices at the international market.
“It is a welcome development. This is the beauty of deregulation. What Nigeria has to do now is to ensure that all refineries are working to ensure total competition, so that fuel prices would be determined by market forces of demand and supply.
“Marketers will also tune down price. Since last week, prices have been coming down to N1,100, N1,040. As the prices are going down from the producers, Independent marketers will just add a little margin to sell to customers. That’s the most important thing,“ IPMAN spokesman, Ukadike, stated.
Recall that a few weeks ago, the President of the Dangote Group, Alhaji Aliko Dangote, and petroleum marketers went up in arms after the former accused them of not patronising his refinery.
The businessman said he had over 500 million litres of petrol but the marketers were not coming to buy it due to their penchant for importing substandard petroleum products.
Reacting, the marketers recalled how many times they made attempts to lift petrol from the refinery without any positive response.
Both IPMAN and Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) stated that it was cheaper to import than to buy from Dangote refinery.
PETROAN categorically told our correspondent that it had reached an agreement with international traders to import petrol and sell at prices lower than that of Dangote and the Nigerian National Petroleum Company Limited.
However, the marketers made a U-turn and jettisoned the plan to import fuel into the country having agreed with the 650,000-capacity refinery.
The Federal Government and the Nigerian National Petroleum Company Limited (NNPCL) may have sealed a deal with the Dangote refinery for the supply of 28 million litres of the product to the local market daily.
According to a statement by PETROAN, this was based on resolutions reached by operators.
It was learned that the agreement was finalised with stakeholders in the downstream sector on November 13.
With the resolution, it was learned that the NNPC, marketers, and other traders like depot owners will patronise the Dangote refinery by lifting the 28 million litres of petrol that it reportedly agreed to supply to the Nigerian market.
If implemented, experts said this means the $20bn refinery would prioritise the Nigerian market before exporting its product out of the country. It also means that marketers would consider the Dangote refinery before any form of fuel importation.
In the statement on Sunday, the leadership of the PETROAN disclosed that a resolution was held by stakeholders in the downstream sector, including the NNPC, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the President of Dangote Dangote Group, Alhaji Aliko Dangote and marketers.
According to PETROAN, it was agreed that marketers can now lift all of Dangote’s petroleum products.
“PETROAN praises the management of the NMDPRA under the leadership of Engr Farouk Ahmed; the Group Chief Executive Officer of NNPC, Mele Kyari; the President of the Dangote Refinery Alhaji Aliko Dangote; the leadership of MEMAN and DAPPMAN, PETROAN as well as IPMAN for reaching a resolution for oil marketing companies to buy all Dangote refinery products.
“The resolution includes Dangote refinery guaranteeing to sell an average of 28,000,000 litres of PMS daily for the next six months to oil marketers for domestic consumption in the Nigerian market,” the statement signed by the PETROAN spokesman, Joseph Obele, said.
According to Obele, the National President of PETROAN, Billy Harry, while speaking about the meeting, expressed optimism that the resolutions would bring succour to the downstream sector and improve the Nigerian economy.
The PETROAN national president had said the new deal was part of a resolution reached by stakeholders on the absorption of domestic petroleum product production by Nigerian oil marketing companies, including the NNPC.
Harry was quoted as stating that “the resolution will attract so many benefits which includes stability of petroleum products, control of price fluctuations, maintaining transparent communication, addressing conflicts proactively, and fostering collaboration among key stakeholders players.
On his part, Obele said those who signed the resolution include NMDPRA, NNPCL, Edo Refinery, Dangote Refinery, Waltersmith Refinery, Aradel Refinery, IPMAN, and PETROAN.
“The document indicates the availability of Aviation Turbine Kerosene and diesel from all domestic refineries would be provided to the NMDPRA for the same period of six months and must be subject to consideration for import as may be required,” Obele stated.
He said the meeting resolved that the NMDPRA must establish the basis for allocating import volumes to oil marketing companies on the assumptions of the aggregate of domestic refinery capacity with the understanding to cover shortfalls for respective marketers.
Obele stressed that according to the resolution, domestic refineries would provide fixed quantities and delivery windows, which must be a period of two months preceding the month of delivery to the customer and NMDPRA.
He added that individual oil marketing companies are to enter direct commercial agreements with domestic refineries on a willing-buyer, willing-seller basis.
A document sighted by our correspondent and titled, ‘Resolution on the absorption of Domestic Petroleum product production by Nigerian Oil Marketing Companies (OMCs), including NNPC Limited’, said:
“Further to the engagement between NNPCL, MEMAN and DAPPMAN of 13th November 2024 and subsequent revisions with the NMDPRA and other stakeholders, the following framework shall be executed:
“Dangote Refinery is to guarantee an average of 28,000,000 litres of PMS daily for the next six months subject to review as necessary. Availability of ATK and AGO from all domestic refineries shall be provided to the NMDPRA for the same period and be subject to consideration for import as may be required.
“NMDPRA to establish the basis for allocating import volumes to OMCS on the assumptions of the aggregate of domestic refinery capacity with understanding to cover shortfalls for respective marketers based on validated needs by the company and current national depots evacuation.”
The resolution added, “The domestic refineries are to provide fixed quantities and delivery windows two months preceding the month of delivery (M-2) to the customer and NMDPRA.
“Individual OMCs enter direct commercial agreements with domestic refineries on a willing buyer willing seller basis. AII NMDPRA fees (including MDGIF) to be included in every sales invoice issued by domestic refineries.”
NNPC denies deal
However, the NNPC has denied the resolution as presented by PETROAN.
In a chat with our correspondent on Sunday, the NNPC Chief Communications Officer, Olufemi Soneye, described the resolution as untrue
When asked if it was true that stakeholders met and agreed that Dangote should supply 28 million litres of petrol daily in the next six months, Soneye replied, “Not true”.
Similarly, the spokesperson of the Dangote Group, Anthony Chiejina, denied knowledge of the 28 million litres per day resolution.
“I don’t know. The PETROAN guy should do his job and stop chasing the media for publicity,” Chiejina replied.
Nevertheless, the PETROAN spokesman insisted that his claims were factual.
“Did they deny the document? It is real and factual,“ he stressed. – Punch.
