The Dangote Petroleum Refinery reports that the price of their Premium Motor Spirit has been lowered from N990 to N970 per liter.
Marketers would purchase the product from the refinery for this sum, according to reports.
Anthony Chiejina, the Dangote Group’s Group Chief Branding and Communications Officer, said in a statement issued on Sunday that the cut was made in recognition of Nigerians as the year draws to a close.
“This is our way of thanking the good people of Nigeria for their unflinching support in making the refinery a reality as the year draws to a close. Additionally, this is to express gratitude to the government for its support, as it will enhance the policies implemented to promote domestic business for the benefit of all of us,” the statement said.
Chiejina assured Nigerians that the refinery would continue to produce high-quality, sustainable, and ecologically friendly petroleum products without sacrificing quality.
The statement concluded, “We are committed to continue increasing production in order to meet and exceed our domestic fuel consumption, thereby eliminating any concern regarding a shortage in supply.”
The Major Energies Marketers Association of Nigeria announced on Friday that the landing cost of imported gasoline is now N971/liter, as our correspondent remembers.
Due to competition brought about by the liberalization of the downstream industry, independent and big marketers have recently reported that gas pump prices have begun to decline in several parts of Nigeria.
The agreement between IPMAN and Dangote is progressively lowering the price of PMS, according to Chinedu Ukadike, spokesman for the Independent Petroleum Marketers Association of Nigeria.
“The mere news that Dangote and IPMAN have met and are prepared to do business has caused a sharp decline in product pricing. Due to competition, prices have decreased by about N10 or N15, as you would have observed.
“Independent marketers no longer purchase via intermediaries. We intend to purchase straight from the manufacturer. The rivalry is thus beginning. Additionally, I want to let you know that the price will not be as high as it is now before the year is out.
As you can see, the price of refined petroleum products has dropped by almost N10 as a result of our meeting with Dangote. This development is positive. We haven’t even begun yet. Recall that I already assured you that as IPMAN began to lift from Dangote, prices will decrease,” Ukadike said.
A significant oil marketer also confirmed the price decline, citing the liberalization of the downstream oil industry as the cause.
“The lack of significant announcements is the main reason why people are not recognizing that prices are declining. The large oil marketer, who spoke in confidentially because he lacked the authority to do so, said, “Deregulation is in full swing and competition is the order of the day.”
The dealer said, “Last week it was N1,080 (in some filling stations) if you were observant,” when informed that the price of gasoline was still more than N1,000 per liter and was N1,070 per liter in filling stations run by his company.
N900 is below cost, therefore you could not see it. Simply put, don’t anticipate a set price that will never change. It has the ability to rise and fall.
Additional price reductions
Marketers responded to the price cut by calling the move a positive step.
IPMAN claims that Dangote’s action might have something to do with the decline in fuel prices on the global market.
“This is a positive development.” The beauty of deregulation is this. Nigeria must now make sure that every refinery is operating to maintain complete competition so that supply and demand will decide petroleum prices.
Additionally, marketers will scale down prices. Prices have been dropping to N1,100 and N1,040 since last week. Independent marketers will simply add a small margin to sell to clients as producers lower their prices. That is the most crucial factor, Ukadike, the spokesperson for IPMAN, told Newsline.
As you may remember, a few weeks ago, petroleum marketers and Alhaji Aliko Dangote, the president of the Dangote Group, became enraged when the former accused them of not using his refinery.
The merchant claimed that despite having more than 500 million liters of gasoline, the marketers were not interested in purchasing it since they frequently import inferior petroleum goods.
The marketers responded by recalling the several occasions they tried to remove gasoline from the refinery but received no favorable reaction.
According to both IPMAN and PETROAN, importing was less expensive than purchasing from the Dangote refinery.
PETROAN told our correspondent unequivocally that it had made a deal with foreign traders to import gasoline and sell it for less than Dangote and the Nigerian National Petroleum Company Limited.
However, after agreeing with the refinery with a capacity of 650,000, the marketers changed their minds and abandoned the proposal to import fuel into the nation.
28 ml of supply
The Dangote refinery may have signed an agreement with the Federal Government and the Nigerian National Petroleum Company Limited to supply 28 million liters of the product to the local market per day.
The Petroleum Products Retail Outlets Owners Association of Nigeria said in a statement that this was based on operator resolutions.
As a result of the settlement, it was discovered that the NNPC, marketers, and other merchants, such as depot owners, will lift the 28 million liters of gasoline that the refinery allegedly pledged to deliver to the Nigerian market in order to support it.
According to analysts, if this were to be put into practice, the $20 billion refinery would prioritize the Nigerian market before selling its goods abroad. Additionally, it implies that before importing any kind of petroleum, marketers will take the Dangote refinery into account.
The NNPC, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the president of the Dangote Group, Alhaji Aliko Dangote, and marketers were among the downstream sector stakeholders who held a resolution, according to a statement released by PETROAN’s leadership on Sunday.
It was decided that marketers might now lift all of Dangote’s petroleum products, according to PETROAN.
“PETROAN commends the NMDPRA’s management, led by Engr. Farouk Ahmed; Mele Kyari, the Group Chief Executive Officer of NNPC; Alhaji Aliko Dangote, the President of the Dangote Refinery; and MEMAN and DAPPMAN, PETROAN, and IPMAN for resolving the issue of oil marketing companies purchasing all Dangote refinery products.”
According to the statement signed by PETROAN spokesman Joseph Obele, “the resolution includes Dangote refinery guaranteeing to sell an average of 28,000,000 liters of PMS daily for the next six months to oil marketers for domestic consumption in the Nigerian market.”
Speaking about the meeting, PETROAN National President Billy Harry said he was hopeful that the resolutions will help the downstream industry and boost the Nigerian economy, according to Obele.
The new agreement, according to the national president of PETROAN, was a component of a resolution that stakeholders reached on the NNPC and other Nigerian oil marketing businesses’ absorption of domestic petroleum product manufacturing.
“The resolution will attract so many benefits which include stability of petroleum products, control of price fluctuations, maintaining transparent communication, addressing conflicts proactively, and fostering collaboration among key stakeholders players,” declared Harry, according to a quotation.
According to Obele, NMDPRA, NNPCL, Edo Refinery, Dangote Refinery, Waltersmith Refinery, Aradel Refinery, IPMAN, and PETROAN are among the companies who signed the resolution.
“According to the document, the NMDPRA would receive Aviation Turbine Kerosene and Diesel from all domestic refineries for the same six-month period. It must be subject to consideration for import as may be required,” Obele said.
According to him, the meeting decided that the NMDPRA must set up the framework for distributing import quantities to oil marketing firms based on the total capacity of domestic refineries, with the understanding that this will let each marketer fill in any gaps.
Obele emphasized that domestic refineries will supply defined amounts and delivery windows in accordance with the resolution, which must be two months prior to the month of delivery to the customer and NMDPRA.
On a willing-buyer, willing-seller basis, he continued, independent oil marketing firms are to enter into direct commercial arrangements with domestic refineries.
“Resolution on the absorption of Domestic Petroleum product production by Nigerian Oil Marketing Companies (OMCs), including NNPC Limited,” according to a document our source saw, stated:
“The following framework will be implemented in light of the November 13, 2024, engagement between NNPCL, MEMAN, and DAPPMAN, as well as any follow-up adjustments with the NMDPRA and other stakeholders:
For the next six months, Dangote Refinery is expected to produce an average of 28,000,000 liters of PMS each day, subject to reassessment as needed. The NMDPRA will be given access to ATK and AGO from all domestic refineries for the same duration, and imports may be considered if necessary.
According to the company’s verified demands and the evacuation of the current national depots, “NMDPRA will establish the basis for allocating import volumes to OMCS based on the assumptions of the aggregate of domestic refinery capacity with understanding to cover shortfalls for respective marketers.”
The resolution also said, “The domestic refineries are required to give the customer and NMDPRA fixed quantities and delivery windows two months prior to the month of delivery (M-2).”
“On a willing buyer, willing seller basis, individual OMCs enter into direct commercial arrangements with domestic refineries. Every sales invoice that domestic refineries issue must contain AII NMDPRA fees, including MDGIF.
NNPC rejects the deal.
But the resolution put forth by PETROAN has been rejected by the NNPC.
Olufemi Soneye, the NNPC Chief Communications Officer, called the resolution “untrue” in an interview with our correspondent on Sunday.
Soneye responded, “Not true,” when asked if it was accurate to say that stakeholders had gathered and decided that Dangote should provide 28 million liters of gasoline per day over the course of the next six months.
Anthony Chiejina, the Dangote Group’s spokesperson, also denied being aware of the resolution pertaining to the 28 million liters per day.
“I’m not sure. Chiejina retorted, “The PETROAN guy should quit chasing the media for publicity and do his job.”
The PETROAN spokesperson, however, maintained that his assertions were true.
Did they reject the file? “It is factual and real,” he said.
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