Amid a reduction in petrol landing costs, fuel marketers are set to undercut Dangote Refinery’s pricing with imported fuel, signaling a shift in pricing strategies.
The cost of landing petrol in Nigeria has decreased from approximately N1,100 last month to a range of N978 to N1,000.
The association pledged to sell imported petrol at a lower price than what is offered by the Dangote refinery.
The association stated that its petrol would also be priced lower than that of the Nigerian National Petroleum Company Limited (NNPCL).
Dr. Obele, on the other hand, explained that the cost of Dangote PMS could be higher because the refinery is still processing imported crude oil purchased at a premium price.
He stated that the association had secured agreements with several international fuel suppliers to import PMS at a favorable rate, noting that the product would be delivered in Nigeria at approximately N800 per liter.
PETROAN is an association, and we have established a limited liability company named PETROAN Limited. We obtained our license from the Corporate Affairs Commission and have submitted an application to NMDPRA for importation authorization. Once granted this authority, we plan to source imports from the most favorable market available.
It’s important for the general public to understand that landing costs differ in each country. PETROAN has partnered with an international supplier, which means the product will arrive here at nearly N800 per liter. Since PETROAN offers the best value for Nigerian citizens, we urge the regulatory agency to promptly grant us import authorization so our initial stock can be imported without delay.
“We guarantee that PETROAN will offer significantly lower prices than Dangote and much cheaper rates than the NNPC. Currently, the NNPC sells to us at N1,040 per liter; however, PETROAN’s pricing will be better due to our successful negotiations. Our partners and international associates are prepared to ensure we provide Nigerians with exceptional value,” stated Obele.
The spokesperson for the association mentioned that he couldn’t reveal the specific quantity to be imported, but emphasized that PMS brought in by PETROAN would have a lower cost.
Obele clarified that Dangote was exclusively supplying NNPC, which in turn distributed to marketers.
I’m letting you know that NNPC’s role as a middleman remains active until tomorrow. Neither NNPC nor Dangote has disclosed the amount involved in their transaction, suggesting they have agreed not to make this information public.
“We only know the price at which NNPC is selling it to us, but the details of their transaction remain undisclosed. NNPC has not shared this information, despite public requests for transparency,” he stated.
Discussing the landing cost of N978 per litre, he highlighted that it varies from one country to another.
“The landing cost is now between N978 and N1,000, compared to about N1,100 last month. This change is due to a decrease in crude oil prices on the international market. Consequently, PMS has also seen a price reduction globally. Therefore, I believe we should observe similar reductions,” he stated.
When reminded about the recent price increase by NNPC, Obele responded, “No, our main concern is that the Dangote refinery is currently our only operational facility. Moreover, Dangote has publicly stated that he is still processing crude oil purchased from the international market and hasn’t begun refining any naira-for-crude stock yet. Therefore, we can’t anticipate a price reduction when he’s working with old stocks bought at $80 and $78 per barrel.”
Now that the price has decreased to $72, we don’t automatically plan on adjusting it. You might argue that it’s still based on older stock prices. However, with crude oil’s recent drop in price, we’d like those purchasing new stocks from this current trade to consider lowering their pricing. If Dangote refined his available stock using an older supply acquired when crude was at $80 per barrel, then a downward adjustment isn’t expected.
People should wait to criticize the refinery until it begins production using the stock received last week, purchased in naira. Currently, I believe the selling rate reflects previous crude oil costs.
Meanwhile, on Friday, oil marketers disclosed that the price of petrol from the Dangote Petroleum Refinery ranged between N1,015 and N1,028 per litre based on the quantity purchased.
According to information released on Thursday by the Major Energies Marketers Association of Nigeria, the landing cost of petrol was N978.01 per litre as of October 31, 2024.
It mentioned that the landing cost of diesel was N1,069.97 per liter, while aviation fuel was priced at N1,119.67 per liter.
The landing cost of these white products is the unit price of the imported commodities upon their arrival on Nigeria’s shores.
Since the Dangote refinery began distributing refined petroleum products within the country, it has consistently declined to disclose their prices despite numerous requests.
A prominent marketer, who requested anonymity due to not being authorized to discuss the issue, confirmed that petrol from the Dangote refinery was more expensive than imported PMS.
The official stated that the refinery presently sells to oil marketers purchasing in bulk at N1,015 per liter and to smaller buyers at N1,028 per liter.
The leading marketer also revealed that three cargoes of petroleum products recently arrived and were unloaded at seaports along the country’s borders.
Dangote is offering a price of N1,015 per litre for bulk buyers, while selling to non-bulk marketers at N1,028 per litre.
“However, imported PMS is less expensive than Dangote’s own product. This is why he’s making every effort to persuade the government to halt fuel importation,” explained the dealer.
When reached for comment, Tony Chiejina, the Chief Corporate Communications Officer of Dangote Group, stated that the figures being circulated were incorrect.
He dismissed reports about Dangote’s petrol prices as fake news, expressing curiosity about their origin.
“This is misinformation. Individuals are simply sharing whatever they prefer,” he stated.
Chiejina, on the other hand, chose not to disclose the exact price.
Peoplesmind
